External shocks and persistence of external debt in open vulnerable economies: The case of Africa |
| |
| Authors: | Stella Muhanji Kalu Ojah |
| |
| Affiliation: | 1. University of Witwatersrand, Private Bag 98, Wits, Johannesburg 2050, South Africa;2. Kabarak University, Private Bag 20157, Kabarak, Kenya;1. University of Antwerp, Institute of Development Policy and Management (IOB), Prinsstraat 13, 2000 Antwerpen, Belgium;2. International Food Policy Research Institute (IFPRI), Development Strategy and Governance Division, IFPRI-Kampala, Plot 15, East Naguru Road, PO Box 28565, Uganda;3. Université Paris Dauphine, LEDa, IRD, UMR 225 DIAL, France;1. Department of Computer Engineering, German Jordanian University, Jordan;2. Department of Electrical and Computer Engineering, Boston University, USA;1. School of Economics, Shanghai University of Finance and Economics, China;2. Department of Economics, Monash University, Australia;1. School of Finance and Economics, Taylor’s University Selangor, Malaysia;2. Economics Program, School of Social Sciences, Universiti Sains Malaysia, 11800 USM, Penang, Malaysia |
| |
| Abstract: | We examine the extent to which two external shocks, the world interest rate shock and the commodity price shock, lead to external debt accumulation in Africa. We begin by estimating a dynamic stochastic general equilibrium model of external debt burden, and solve the linear equations using the quadratic method of undetermined coefficients. Consequently, we run simulations of 50 time periods. Our results show that both world commodity price and world interest rate shocks impact external debt accumulation in the majority of our sample African countries. Interestingly, world commodity price shocks lead to an increase in external debt while world interest rate shocks appear to discourage accumulation of external debt. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
