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Explaining Episodes of Growth Accelerations, Decelerations, and Collapses in Western Africa

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  • Gonzalo Salinas
  • Patrick A. Imam

Abstract

The growth literature has had problems explaining the "sub-Saharan African growth dummy" in cross-country regressions. Instead of taking the usual approach of focusing on long-run growth and assuming that sub-Saharan countries have homogenous parameters in growth regressions, we concentrate our analysis on episodes of growth turnarounds (identifying growth accelerations, decelerations, and collapses) and use only West African countries in our sample. The driving force of growth turnarounds are estimated by analyzing external shocks, political and institutional changes, economic reforms, and indicators particularly relevant to the region. Using probits for a group of 22 Western African economies for the period 1960-2006, we find that growth accelerations are most clearly associated with external shocks, economic liberalization, political stability, and closeness to the coast; decelerations occurred during short-lived regimes and when corruption indices weakened; and collapses are linked to external shocks, falling domestic credit, and proximity to the coast. We then identify policy implications.

Suggested Citation

  • Gonzalo Salinas & Patrick A. Imam, 2008. "Explaining Episodes of Growth Accelerations, Decelerations, and Collapses in Western Africa," IMF Working Papers 08/287, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:08/287
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    References listed on IDEAS

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    1. Patrick A. Imam & Eleonara Granziera & Norbert Funke, 2008. "Terms of Trade Shocks and Economic Recovery," IMF Working Papers 08/36, International Monetary Fund.
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    Cited by:

    1. Montfort Mlachila & Tidiane Kinda, 2011. "The Quest for Higher Growth in the WAEMU Region; The Role of Accelerations and Decelerations," IMF Working Papers 11/174, International Monetary Fund.
    2. Kalyvitis, Sarantis & Vlachaki, Irene, 2012. "When does more aid imply less democracy? An empirical examination," European Journal of Political Economy, Elsevier, vol. 28(1), pages 132-146.
    3. Hostland, Douglas & Giugale, Marcelo M., 2013. "Africa's macroeconomic story," Policy Research Working Paper Series 6635, The World Bank.
    4. Ndongo Samba Sylla, 2014. "From a marginalised to an emerging Africa? A critical analysis," Review of African Political Economy, Taylor & Francis Journals, vol. 41(sup1), pages 7-25, October.

    More about this item

    Keywords

    Emerging markets; Economic models; Developed countries; Stock markets; Growth; Acceleration; Deceleration; Africa; terms of trade; economic liberalization; inflation; external shocks; world demand; Volatility spillovers; Contagion;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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