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Macroeconomic Shocks and Aggregate Welfare in Sub-Saharan African Countries

Author

Listed:
  • Evelyn Nwamaka Ogbeide-Osaretin

    (Department of Economics, Edo University Iyamho, Edo State, Nigeria)

  • Victoria Nkiruka Ishiwu

    (Department of Economics, University of Nigeria, Nsukka, Enugu State, Nigeria)

Abstract

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 Sub- Saharan 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.

Suggested Citation

  • Evelyn Nwamaka Ogbeide-Osaretin & Victoria Nkiruka Ishiwu, 2021. "Macroeconomic Shocks and Aggregate Welfare in Sub-Saharan African Countries," Business & Management Compass, University of Economics Varna, issue 4, pages 380-396.
    • Handle: RePEc:vrn:journl:y:2021:i:4:p:380-396
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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