Macroeconomic volatility, trade and financial liberalization in Africa

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Ahmed, Abdullahi D and Suardi, S (2009) Macroeconomic volatility, trade and financial liberalization in Africa. World Development, 37 (10). pp. 1623-1636. ISSN 0305-750X

Abstract

This paper examines the effects of financial and trade liberalization on growth volatility of real output and consumption in Africa. Our results suggest trade liberalization is associated with greater output and consumption growth volatility while financial liberalization increases the efficacy of consumption smoothing and stabilizes income and consumption growth. In addition, we find financial market depth and institutional quality operate jointly with trade and financial openness to reduce volatility in output and consumption growth. There is also evidence that good institutions which foster low inflation levels and volatility promote consumption and output growth stability.

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Item type Article
URI https://vuir.vu.edu.au/id/eprint/4114
DOI https://doi.org/10.1016/j.worlddev.2009.03.009
Official URL http://www.sciencedirect.com/science/article/pii/S...
Subjects Historical > Faculty/School/Research Centre/Department > Centre for Strategic Economic Studies (CSES)
Current > FOR Classification > 1402 Applied Economics
Historical > SEO Classification > 9101 Macroeconomics
Keywords ResPubID17913. macroeconomic volatility, trade and financial liberalisation, trade liberalisation, financial liberalisation, financial growth, financial markets, consumption, Sub-Saharan Africa, fiscal policy, inflation, financial development, Botswana
Citations in Scopus 36 - View on Scopus
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