Economic openness, trade restrictions and external shocks: modelling short run effects in Sub-Saharan Africa

Rattsø, Jørn; Torvik, Ragnar

doi:10.1016/s0264-9993(97)00024-2

Cited by 11 publications

(4 citation statements)

References 19 publications

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“…Our focus is rather on the effect of the gold price boom, both directly and indirectly via the relative productivity between domestic sectors. The impact of sanctions on the Dutch disease dynamics might be captured by introducing a foreign exchange constraint along the lines applied by Rattsø and Torvik (1998) in an analysis of export price shocks in Zimbabwe. The growth and distributive effects of economic sanctions are analyzed by Rattsø and Stokke (2005).…”

Section: Discussionmentioning

confidence: 99%

Resource boom, productivity growth and real exchange rate dynamics — A dynamic general equilibrium analysis of South Africa

Stokke¹

2008

Economic Modelling

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We study the impact of a natural resource boom on structural change and real exchange rate dynamics, taking into account the indirect effect via relative sectoral productivity changes.Our contribution relative to the Dutch disease literature is threefold. First, the productivity specification is extended from simple learning by doing to include trade barriers and technology gap dynamics, consistent with the modern understanding of productivity growth.Second, we offer a dynamic general equilibrium model with imperfect substitution between domestic and foreign goods. Third, the model is applied to South Africa and analyzes the macroeconomic impact of the gold price increase in the 1970s. Political pressure for rapid domestic spending after a surge in resource rents tends to generate myopic government behavior with unsustainable high consumption spending. Such fiscal response to higher resource income is captured by the model specification. Numerical simulations show how the resource boom can help explain the structural change and real exchange rate path observed in South Africa. Due to productivity effects the initial real appreciation is followed by gradual depreciation of the real exchange rate.JEL no: O33, O41, O55, Q33.

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Section: Discussionmentioning

confidence: 99%

Resource boom, productivity growth and real exchange rate dynamics — A dynamic general equilibrium analysis of South Africa

Stokke¹

2008

Economic Modelling

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“…There are also early examples of fairly aggregative country-specific simulation (CGE) models, which make no attempt at tracing through to individual household groups, but nevertheless examine the short-run consequences of trade liberalization. Classic examples are by Rattsø and Torvik (1998) in both an SSA and Zimbabwe context (they examine import rationing and trade liberalization but recognize the sensitivity of the results to alternative macro closure rules) and Davies, Rattsø and Torvik (1998) who consider the macroeconomic effects of trade liberalization in Zimbabwe. Bigsten and Fosu (2004) use an econometric approach using data for Cameroon, Ghana, Kenya and Zimbabwe to demonstrate that under trade liberalization, increases in exports of manufacturing firms lead to efficiency gains.…”

Section: Link 1: Globalization and Growthmentioning

confidence: 99%

Globalization, Growth, Inequality, and Poverty in Africa: A Macroeconomic Perspective

Round¹

2010

The Poor Under Globalization in Asia, Latin America, and Africa

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The last two decades has witnessed an increase in globalizing influences affecting most countries, Africa included. These influences have arisen partly as a result of domestic and international policies, such as trade policies, and partly as a result of general globalizing impulses, such as technological developments and enhanced communications. The single overarching objective of this paper is to outline the macro evidence on the extent to which globalization is taking place and poverty is reducing in Africa, and to consider this to both characteristics of the region (i.e., within the region) and relative to other global regions. It draws on some of the most recent evidence about the globalizing processes in various forms so as to try to determine the speed and extent of globalization in Africa. This helps to put into proper perspective the impact of globalization on poverty and inequality. It is essentially a partial and descriptive approach, at best indicative of associations, and stops short of attempting to identify, empirically, channels of influence and causal relationships.

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“…20 It is common to assume that developing countries have some maximum sustainable trade deficit and hence to fix the trade balance. Rattso and Torvik (1998) The analyses included variations in these closure rules as part of the sensitivity analyses. Relaxation of the assumption of unemployed unskilled labour did influence the results substantially, as did allowing Botswana's diamond exports to expand.…”

Section: Closurementioning

confidence: 99%

“…20 20 It is common to assume that developing countries have some maximum sustainable trade deficit and hence to fix the trade balance. Rattso and Torvik (1998) discuss this in the context of African economies. …”

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confidence: 99%

Bilateral Free Trade Agreements and Customs Unions: The Impact of the EU Republic of South Africa Free Trade Agreement on Botswana

McDonald

Walmsley

2008

World Economy

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The EU has indicated that after 2008 its trade relationships with developing countries will be dominated by the development of preferential trade agreements. Although not a consequence of the Cotonou Agreement, the free trade agreement between the EU and the Republic of South Africa (EU RSA FTA) is clearly one of the first fruits of this approach to trade relationships. However, there is no evidence that the design of the EU RSA FTA incorporated a comprehensive general equilibrium evaluation of the agreement for either the signatories or the other southern African nations. The analyses reported here indicate that while the EU RSA FTA may substantially benefit the signatories, there are appreciable negative impacts for other states, especially the RSA's immediate neighbours. Moreover, the reluctance of the EU to fully liberalise trade in food and agriculture commodities results in a major reduction in the benefits for the RSA without ameliorating substantively the adverse implications for other nations.

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Economic openness, trade restrictions and external shocks: modelling short run effects in Sub-Saharan Africa

Cited by 11 publications

References 19 publications

Resource boom, productivity growth and real exchange rate dynamics — A dynamic general equilibrium analysis of South Africa

Resource boom, productivity growth and real exchange rate dynamics — A dynamic general equilibrium analysis of South Africa

Globalization, Growth, Inequality, and Poverty in Africa: A Macroeconomic Perspective

Bilateral Free Trade Agreements and Customs Unions: The Impact of the EU Republic of South Africa Free Trade Agreement on Botswana

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