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Analyzing slowdown and meltdowns in the African countries: New evidence using Fourier quantile unit root test

Author

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  • Lee, Yi-Lung
  • Ranjbar, Omid
  • Jahangard, Fateme
  • Chang, Tsangyao

Abstract

In this paper, we analyze growth dynamics in the 25 African countries over the period 1950–2016. To this end, first, we test the stochastic properties of real per capita GDP series. While conventional unit root and standard quantile unit root tests do not reject a unit root, using a novel quantile unit root test which allows for smooth breaks, we could find the results in favor of trend stationarity of 16 out of 25 real per capita GDP series. Our results indicate that in some countries positive shocks to real per capita GDP series have permanent effect and in some of them, the negative shocks. Whereas all of African countries in our sample specialized in producing and exporting primary products, hence to have favorable growth performance, they have to manage terms of trade shocks to avoid large swings in the real per capita GDP.

Suggested Citation

  • Lee, Yi-Lung & Ranjbar, Omid & Jahangard, Fateme & Chang, Tsangyao, 2020. "Analyzing slowdown and meltdowns in the African countries: New evidence using Fourier quantile unit root test," International Review of Economics & Finance, Elsevier, vol. 65(C), pages 187-198.
    • Handle: RePEc:eee:reveco:v:65:y:2020:i:c:p:187-198
    DOI: 10.1016/j.iref.2019.10.008
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    More about this item

    Keywords

    GDP per capita; Unit root; Quantile regression; Fourier expansion; Smooth breaks; Africa;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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