Open AccessA Macroeconometric Model for the Sudan Economy: Empirical Evidence from Error Correction Framework 1956-2010
Author(s) -
Khalafalla Ahmed Mohamed Arabi,
Suliman Zakaria Suliman Abdalla
Publication year - 2013
Publication title -
research in world economy
Language(s) - English
Resource type - Journals
eISSN - 1923-399X
pISSN - 1923-3981
DOI - 10.5430/rwe.v4n1p95
Subject(s) - disequilibrium , error correction model , econometrics , economics , sign (mathematics) , error detection and correction , macroeconomic model , economy , cointegration , macroeconomics , mathematics , algorithm , medicine , mathematical analysis , ophthalmology
This paper aims to build a macroeconometric model for the Sudan economy to be used as an analytical tool to describe the operation of the economy. The model comprises six equations built around the Keynesian identity with 12 macroeconomic variables. Based on error correction model framework, Engle-Granger two steps method was followed and a system of simultaneous equations was estimated by Three Stages Least Squares. The empirical results show that the error correction terms which exemplify the disequilibrium state and the short-run and long-run effects got the right sign and magnitude