Analyzing slowdown and meltdowns in the African countries: New evidence using Fourier quantile unit root test

In this paper, we analyze growth dynamics in the 25 African countries over the period 1950–2016. To this end, first, we test the stochastic properties of real per capita GDP series. While conventional unit root and standard quantile unit root tests do not reject a unit root, using a novel quantile u...

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Bibliographic Details
Published in:International review of economics & finance 2020-01, Vol.65, p.187-198
Main Authors: Lee, Yi-Lung, Ranjbar, Omid, Jahangard, Fateme, Chang, Tsangyao
Format: Article
Language:English
Subjects:
Africa
Fourier expansion
GDP per capita
Quantile regression
Smooth breaks
Unit root
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Summary:In this paper, we analyze growth dynamics in the 25 African countries over the period 1950–2016. To this end, first, we test the stochastic properties of real per capita GDP series. While conventional unit root and standard quantile unit root tests do not reject a unit root, using a novel quantile unit root test which allows for smooth breaks, we could find the results in favor of trend stationarity of 16 out of 25 real per capita GDP series. Our results indicate that in some countries positive shocks to real per capita GDP series have permanent effect and in some of them, the negative shocks. Whereas all of African countries in our sample specialized in producing and exporting primary products, hence to have favorable growth performance, they have to manage terms of trade shocks to avoid large swings in the real per capita GDP.
ISSN:1059-0560
1873-8036
DOI:10.1016/j.iref.2019.10.008