Determinants of Growth Spells: Is Africa Different?

September 1, 2012

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Format: Chicago

Charalambos G Tsangarides. Determinants of Growth Spells: Is Africa Different?, (USA: International Monetary Fund, 2012) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Do growth spells in Africa end because of bad realizations of the same factors that influence growth spells in the rest of the world, or because of different factors altogether? To answer this question, we examine determinants of growth spells in Africa and the rest of the world using Bayesian Mode Averaging techniques for proportional hazards models. We define growth spells as periods of sustained growth episodes between growth accelerations and decelerations and then relate the probability that a growth spell ends to various determinants including exogenous shocks, physical and human capital, macroeconomic policy, and sociopolitical factors. Our analysis suggests that determinants of growth spells in Africa are different from those in the rest of the world. The majority of the identified robust determinants have a distinct impact in only one of the two samples: initial income, terms of trade, exchange rate undervaluation and inflation, influence spells only in the world sample, while openness and droughts seem to only affect Africa. In addition, a few common determinants - proxies for human and physical capital and changes in the world interest rate - have very different marginal effects in the two samples.

Subject: Exchange rates, Foreign exchange, Human capital, International trade, Labor, National accounts, Oil prices, Personal income, Prices, Terms of trade

Keywords: Africa, Africa sample, Asia and Pacific, Bayesian Model Averaging, Exchange rate, Exchange rates, Growth experience, Growth spell, Human capital, Interest rate, International Growth, Oil prices, Per capita income, Personal income, Robustness, Spells in Africa, Sub-Saharan Africa, Survival analysis, Terms of trade, World sample, WP

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2012/227
Stock No:

WPIEA2012227
ISBN:

9781475510225
ISSN:

1018-5941

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