IDEAS home Printed from https://ideas.repec.org/a/eso/journl/v41y2010i1p21-41.html
   My bibliography  Save this article

Output Collapse, Growth and Volatility in Sub-Saharan Africa: A Regime-Switching Approach

Author

Listed:
  • Julie Byrne

    (National University of Ireland, Maynooth)

Abstract

A Markov-switching model with time-varying transition probabilities is applied to sub- Saharan African data to examine the link between output collapses and growth. In the model, the growth rate moves discretely between two regimes; one characterised by a stable positive average growth rate, and a collapse regime characterised by negative and volatile growth rate. The aim is to derive plausible estimates of the transition probabilities for the Markov chain component. These estimates are then included in a vector of time-varying country-specific variables for the Markov-switching estimation. The results show that the probability of an economy remaining in a stable growth regime increases with institutional quality, education, improving terms of trade and increased concentration on manufacturing industries. The analysis takes into account the fact that the dynamics of output following a large collapse differs significantly from the dynamics of output during more stable time periods by taking a non-linear approach.

Suggested Citation

  • Julie Byrne, 2010. "Output Collapse, Growth and Volatility in Sub-Saharan Africa: A Regime-Switching Approach," The Economic and Social Review, Economic and Social Studies, vol. 41(1), pages 21-41.
    • Handle: RePEc:eso:journl:v:41:y:2010:i:1:p:21-41
    as

    Download full text from publisher

    File URL: http://www.esr.ie/Vol41_1/02-Byrne.pdf
    File Function: First version, 2010
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jesús Crespo Cuaresma & Julia Wörz, 2005. "On Export Composition and Growth," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(1), pages 33-49, April.
    2. Sala-i-Martin, Xavier X., 1996. "Regional cohesion: Evidence and theories of regional growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1325-1352, June.
    3. David E. Bloom & Jeffrey D. Sachs, 1998. "Geography, Demography, and Economic Growth in Africa," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 207-296.
    4. Patricia Alvarez‐Plata & Mechthild Schrooten, 2006. "The Argentinean Currency Crisis: A Markov‐Switching Model Estimation," The Developing Economies, Institute of Developing Economies, vol. 44(1), pages 79-91, March.
    5. Frederick van der Ploeg & Steven Poelhekke, 2009. "Volatility and the natural resource curse," Oxford Economic Papers, Oxford University Press, vol. 61(4), pages 727-760, October.
    6. Sala-i-Martin, Xavier, 1997. "I Just Ran Two Million Regressions," American Economic Review, American Economic Association, vol. 87(2), pages 178-183, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Donatella Saccone & Mario Deaglio, 2020. "Poverty, emergence, boom and affluence: a new classification of economies," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(1), pages 267-306, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jeffrey Frankel, 2014. "Mauritius: African Success Story," NBER Chapters, in: African Successes, Volume IV: Sustainable Growth, pages 295-342, National Bureau of Economic Research, Inc.
    2. R Burger & S du Plessis, 2011. "Examining the Robustness of Competing Explanations of Slow Growth in African Countries," Studies in Economics and Econometrics, Taylor & Francis Journals, vol. 35(3), pages 21-47, December.
    3. Derek Headey, 2008. "The Principal Components of Growth in the Less Developed Countries," Kyklos, Wiley Blackwell, vol. 61(4), pages 568-598, November.
    4. Olivier Parent & Abdallah Zouache, 2009. "Geographical Features vs. Institutional Factors: New Perspectives on The Growth of Africa and Middle-East," Working Papers 490, Economic Research Forum, revised Jun 2009.
    5. Ruba Abdullah Aljarallah, 2020. "The Economic Impacts of Natural Resource Dependency in Gulf Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 36-52.
    6. Durlauf, Steven N. & Quah, Danny T., 1999. "The new empirics of economic growth," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 4, pages 235-308, Elsevier.
    7. Huang, Ho-Chuan, 2005. "Diverging evidence of convergence hypothesis," Journal of Macroeconomics, Elsevier, vol. 27(2), pages 233-255, June.
    8. Persson, Joakim, 1999. "Demographic and Per Capita Income Dynamics: A Convergence Study on Demographics, Human Capital, and Per Capita Income for the US States," Working Paper Series 156, Trade Union Institute for Economic Research.
    9. W. A. Naudé, 2004. "The effects of policy, institutions and geography on economic growth in Africa: an econometric study based on cross-section and panel data," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(6), pages 821-849.
    10. Poot, Jacques, 1999. "A meta-analytic study of the role of government in long-run economic growth," ERSA conference papers ersa99pa171, European Regional Science Association.
    11. Jie Li & Robert Ayres, 2008. "Economic Growth and Development: Towards a Catchup Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 40(1), pages 1-36, May.
    12. Olsson, Ola & Hibbs, Douglas Jr., 2005. "Biogeography and long-run economic development," European Economic Review, Elsevier, vol. 49(4), pages 909-938, May.
    13. Xanthippi Chapsa & Athanasios L. Athanasenas & Nikolaos Tabakis, 2019. "Real Convergence in EU-15: A Comparative Analysis of North versus South Europe," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 3-21.
    14. Jesús Peiró-Palomino, 2016. "Social Capital and Economic Growth in Europe: Nonlinear Trends and Heterogeneous Regional Effects," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(5), pages 717-751, October.
    15. Rossitsa Rangelova, 2009. "Changing Determinants of the Economic Growth – Theoretical Base and Specifics of the Empirics," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 3-32.
    16. Gasmi, Farid & Recuero Virto, Laura & Couvet, Denis, 2023. "An empirical analysis of economic growth in countries exposed to coastal risks - Implications for their ecosystems," TSE Working Papers 23-1399, Toulouse School of Economics (TSE).
    17. Ibrahim A. Elbadawi, "undated". "Reviving Growth in the Arab World," API-Working Paper Series 0206, Arab Planning Institute - Kuwait, Information Center.
    18. Blaise Gnimassoun, Joseph Keneck Massil, 2019. "Determinants of corruption: can we put all countries in the same basket?," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 16(2), pages 239-276, December.
    19. Chris Papageorgiou & Winford H. Masanjala, 2006. "Initial Conditions, European Colonialism and Africa's Growth," Departmental Working Papers 2006-01, Department of Economics, Louisiana State University.
    20. Blaise Gnimassoun & Joseph Keneck Massil, 2016. "Determinants of corruption: Can we put all countries in the same basket?," Working Papers hal-04141599, HAL.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eso:journl:v:41:y:2010:i:1:p:21-41. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Aedin Doris (email available below). General contact details of provider: https://www.esr.ie .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.