Global Financial Crisis and Africa: Is the Impact Permanent or Transitory? Time Series Evidence from North Africa

American Economic Review · 2011 · Volume 101 · Issue 3

Abstract

We utilize time series tests with structural breaks to test for an adverse impact on economic growth rates in North Africa associated with the recent US financial crisis and global recession. One or two breaks are identified for each country, except for Morocco where no break is found, while breaks coincide with the 2008 financial crisis in only two of the six countries (Libya and Mauritania). These findings suggest that, in general, shocks from the recent financial crisis have only temporary effects on economic growth in these countries. Impulse response functions with breaks confirm these results. We conclude by suggesting explanations for these findings.

Keywords

Business Fluctuations, Cycles, Financial Markets and the Macroeconomy, International Business Cycles, Financial Crises, Macroeconomic Analyses of Economic Development, Economic Development: Financial Markets, Saving and Capital Investment, Corporate Finance and Governance, Measurement of Economic Growth, Aggregate Productivity, Cross-Country Output Convergence

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