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Sources of Business Cycles in a Low Income Country

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  • Romain Houssa
  • Jolan Mohimont
  • Christopher Otrok

Abstract

We examine the role of global and domestic shocks in driving macroeconomic fluctuations for Ghana. We are able to study the impact of exogenous shocks including productivity, credit supply, and commodity price shocks. We identify the shocks with a combination of sign and recursive restrictions within Bayesian VAR models. As a benchmark we provide results for South Africa to document the difference between two economies with similar structures but different levels of development. We find that global shocks play a more dominant role in South Africa than in Ghana. These shocks operate through three channels: trade, credit and commodity prices.
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Suggested Citation

  • Romain Houssa & Jolan Mohimont & Christopher Otrok, 2015. "Sources of Business Cycles in a Low Income Country," Pacific Economic Review, Wiley Blackwell, vol. 20(1), pages 125-148, February.
  • Handle: RePEc:bla:pacecr:v:20:y:2015:i:1:p:125-148
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    File URL: http://hdl.handle.net/10.1111/1468-0106.12097
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    Cited by:

    1. Romain Houssa & Jolan Mohimont & Chris Otrok, 2019. "A Model for International Spillovers to Emerging Markets," CESifo Working Paper Series 7702, CESifo Group Munich.
    2. Romain Houssa & Jolan Mohimont & Chris Otrok, 2019. "A model for international spillovers to emerging markets," Working Paper Research 370, National Bank of Belgium.

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