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Can Intra-Regional Trade Act as a Global Shock Absorber in Africa?

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  • Mthuli Ncube

    ()

  • Zuzana Brixiova

    ()

  • Qingwei Meng

    ()

Abstract

The global financial crisis has reiterated the need for Africa to build resilience to global output shocks. In this paper we examine empirically the role of intra-regional and intra-African trade linkages in being an absorber of the global output shocks in two African regional economic communities. We find that deeper intra-regional and intra-African trade ties have helped the East African Community (EAC) absorb the global output shocks. In contrast, the Southern Africa Custom Union (SACU) region has been less able to cope with global output shocks partly due to weaker regional integration. Intra-regional and intra-African trade with fast-growing economies, together with geographically diversified trade links, can strengthen the capacity to absorb global shocks.

Suggested Citation

  • Mthuli Ncube & Zuzana Brixiova & Qingwei Meng, 2014. "Can Intra-Regional Trade Act as a Global Shock Absorber in Africa?," William Davidson Institute Working Papers Series wp1073, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2014-1073
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    References listed on IDEAS

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    Cited by:

    1. McKenzie, Rex A, 2015. "Monetary transmission in Africa: a review of official sources," Economics Discussion Papers 2015-7, School of Economics, Kingston University London.

    More about this item

    Keywords

    Intra-regional trade; output co-movement; regional economic communities; Africa;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F15 - International Economics - - Trade - - - Economic Integration
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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