|Department of Economics|
Jemberu Lulie MEKONNEN
Growth Volatility and Spillovers in The Face of Openness: An Empirical Analysis for Sub-Saharan Africa
(Supervisor:A. Suut Doğruel)
ABSTRACTThis dissertation explains growth volatility and growth spillovers in relation to openness in Sub-Saharan Africa (SSA). In order to explain the stated relationships, first, the effect of growth volatility is assessed through its impact on economic growth. A negative and robust effect of growth volatility on growth is found. Latter, the study considers trade and financial openness as one of the determinants of growth volatility. The findings indicate that both trade and financial openness reduce growth volatility. However, the latter is found to be non-robust. Trade in manufacturing goods significantly reduces volatility in comparison to trade in non-manufacturing goods. FDI and portfolio flows do not reveal a significant effect on growth volatility in SSA. If openness has such important implications, do economic activities in the rest of the world affect economic movements in SSA? The dissertation examined whether growth spillovers occur due to openness. Trade is found to be having a major role in growth spillovers to SSA from major economies of the world and their top trading partners especially after 2001. The findings imply the necessity of stabilization policies and economic diversification to minimize volatility, and the possibility to consider policy coordination to cope up with spillovers during downturns in major economies and their trading partners.