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Productivity-Enhancing Reforms, Private Capital Inflows, and Real Interest Rates in Africa

Author

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  • Manoj Atolia

    () (Department of Economics, Florida State University)

Abstract

The rise in economic growth in some countries of Africa over past two decades, powered mainly by productivity boom, has been associated with large private capital in.ows despite poor integration of the African countries with the world capital markets. While these countries lack access to world capital markets, they are nonetheless highly dollarized and allowing for this fact can explain large private capital in.ows and other stylized macroeconomic facts associated with the productivity-enhancing reforms in Africa. With a number of African economies poised to reap gains in productivity, as they return to stable and sound political and economic environment, the paper suggests the framework that can be used to understand the macroeconomic implications of and suggest appropriate policy responses to such gains in productivity.

Suggested Citation

  • Manoj Atolia, 2003. "Productivity-Enhancing Reforms, Private Capital Inflows, and Real Interest Rates in Africa," Working Papers wp2003_10_02, Department of Economics, Florida State University, revised Dec 2008.
  • Handle: RePEc:fsu:wpaper:wp2003_10_02
    as

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    File URL: ftp://econpapers.fsu.edu/RePEc/fsu/wpaper/wp2003_10_02.pdf
    File Function: Revised Version, 2008-12
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    References listed on IDEAS

    as
    1. Manoj Atolia & Edward F. Buffie, 2004. "Solving for the Global Nonlinear Saddlepath: Reverse Shooting vs. Approximation Methods," Working Papers wp2004_08_01, Department of Economics, Florida State University.
    2. Elsa V. Artadi & Xavier Sala-i-Martin, 2003. "The Economic Tragedy of the XXth Century: Growth in Africa," NBER Working Papers 9865, National Bureau of Economic Research, Inc.
    3. World Bank, 2000. "Can Africa Claim the 21st Century?," World Bank Publications, The World Bank, number 22962.
    4. Masao Ogaki & Jonathan D. Ostry & Carmen M. Reinhart, 1996. "Saving Behavior in Low- and Middle-Income Developing Countries: A Comparison," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 38-71, March.
    5. Miguel A Savastano, 1996. "Dollarization in Latin America; Recent Evidence and Some Policy Issues," IMF Working Papers 96/4, International Monetary Fund.
    6. Alfonso Novales & Emilio Dominguez & Javier J. Perez & Jesus Ruiz, 1998. "Solving Non-linear Rational Expectations Models By Eigenvalue-Eigenvector Decompositions," QM&RBC Codes 124, Quantitative Macroeconomics & Real Business Cycles.
    7. Haltiwanger, John & Singh, Manisha, 1999. "Cross-Country Evidence on Public Sector Retrenchment," World Bank Economic Review, World Bank Group, vol. 13(1), pages 23-66, January.
    8. Amor Tahari & M. Nowak & Michael T. Hadjimichael & Robert L. Sharer, 1996. "Adjustment for Growth; The African Experience," IMF Occasional Papers 143, International Monetary Fund.
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    Cited by:

    1. Majiwa, Eucabeth Bosibori Opande & Lee, Boon & Wilson, Clevo, 2015. "Multi-lateral multi-output measurement of productivity: the case of African agriculture," 2015 Conference, August 9-14, 2015, Milan, Italy 212769, International Association of Agricultural Economists.

    More about this item

    Keywords

    Africa; currency substitution; productivity-enhancing reforms; capital flows; inflation; overshooting; real interest rate;

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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