Abstract
This paper determines which of the three policy approaches: fiscal, monetary and exchange rate can better address external imbalances in the three largest African economies, Nigeria, South Africa and Egypt. To this end, use is made of the panel vector autoregressive model to assess the dynamic effects of shocks emanating from the three policy approaches. The findings of the paper indicate that unlike in many emerging and developed economies the current accounts of these three economies react to fiscal, monetary and exchange rate shocks. More particular, the results of the empirical analysis show that the appreciations of the currencies in the three economies lead to current account surpluses. This is mainly attributed to the fact that most African economies have a high propensity to import with limited productive capacity for exports.
Original language | English |
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Pages (from-to) | 123-136 |
Number of pages | 14 |
Journal | Journal of International Trade and Economic Development |
Volume | 28 |
Issue number | 2 |
DOIs | |
Publication status | Published - 17 Feb 2019 |
Keywords
- External imbalances
- exchange rate policy
- fiscal policy
- monetary policy
- panel VAR
ASJC Scopus subject areas
- Geography, Planning and Development
- Development
- Aerospace Engineering