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Working Paper 183 - Global Economic Spillovers to Africa- A GVAR Approach

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We develop a global vector autoregressive model (GVAR) to analyze the globalgrowth spillover e¤ects on Africa. The model contains 46 African countries and30 developed and emerging market countries, covering 90 percent of the world econ-omy. The results suggest that there is a signi cant growth spillover e¤ect to Africaneconomies from both the Euro zone economies and BRICs. In terms of the mag-nitudes, a percentage decline in Euro zone growth rate could lead to 0.34 to 0.6percentage point drop in African countries growth rates while an equivalent shockin BRICs growth could dent African growth rate to the tune of 0.09 to 0.23 per-centage points. In both cases, the adverse e¤ects on fragile and resource dependenteconomies are closer to the upper bound while the lower bounds apply for the morediversi ed African countries. The paper also looks at the spillover e¤ects of the US,Euro, UK, and Japan (G4) quantitative easing (QE). The results indicate that theQE could have a mild inationary e¤ect in addition to putting pressure on exchangerates to appreciate.

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  • Daniel Zerfu Gurara & Mthuli Ncube, 2013. "Working Paper 183 - Global Economic Spillovers to Africa- A GVAR Approach," Working Paper Series 981, African Development Bank.
  • Handle: RePEc:adb:adbwps:981
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    1. repec:eee:inteco:v:150:y:2017:i:c:p:36-56 is not listed on IDEAS
    2. Samargandi, Nahla & Kutan, Ali M., 2016. "Private credit spillovers and economic growth: Evidence from BRICS countries," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 44(C), pages 56-84.
    3. Flores, Jairo, 2015. "Transmisión de Choques de Política Monetaria de Estados Unidos sobre América Latina: Un Enfoque GVAR," Working Papers 2015-018, Banco Central de Reserva del Perú.

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