Open AccessMacroeconomic Shocks and Aggregate Welfare in Sub-Saharan African Countries
Author(s) -
Evelyn Ogbeide-Osaretin,
Victoria Ishiwu
Publication year - 2021
Publication title -
izvestiya
Language(s) - English
Resource type - Journals
eISSN - 2367-6957
pISSN - 2367-6361
DOI - 10.36997/ijuev2021.65.4.380
Subject(s) - economics , cointegration , welfare , consumption (sociology) , government expenditure , per capita , unemployment , aggregate expenditure , real gross domestic product , inflation (cosmology) , aggregate data , developing country , macroeconomics , monetary economics , economic growth , econometrics , public finance , medicine , social science , population , physics , demography , pathology , sociology , theoretical physics , market economy
This research investigates the outcome of various macroeconomic shocks on the welfare of Sub-Saharan African countries. Data on real private per capita consumption expenditure as a measure of welfare, terms of trade, RGDP per capita, unemployment rate, inflation, government expenditure, and official development assistance were used for the time 1980 to 2019 on ten less-developed countries in SubSaharan Africa. The PVAR estimation method was used as there was no presence of long-run association established amidst the variables confirmed by Pedroni’s panel cointegration tests. The result indicated that a surge in both internal fiscal shocks and external shocks (terms of trade) boosts welfare, while official development assistance does not improve welfare in these countries. We, therefore, advocate the intensification of pro-poor government expenditure and official development assistance. Diversification into non-primary exports is also imperative.