IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-03109383.html
   My bibliography  Save this paper

A Sensitivity Analysis on the Economic Vulnerability-Growth Nexus: Theory and Practice

Author

Listed:
  • Ibrahima Amadou Diallo

    (FERDI - Fondation pour les Etudes et Recherches sur le Développement International)

Abstract

This paper performs a sensitivity analysis of the effects of the Economic Vulnerability Index (EVI) on economic growth both theoretically and empirically. The first part uses Continuous Time Stochastic Optimal Control techniques to build a stochastic endogenous growthmodel which illustrates that an increase in Economic Vulnerability reduces the growth rate in the Economy. The second part employs the new Dynamic Common Correlated Effects Estimator for Heterogeneous Cross-Sectionally Dependent Dynamic Panels Data to empirically undertake the sensitivity analysis of the impacts of the Economic Vulnerability Index on growth. To this end, we build many Economic Vulnerability Indices by changing how its components enter its definition according to a wide range of possible scenarios.

Suggested Citation

  • Ibrahima Amadou Diallo, 2020. "A Sensitivity Analysis on the Economic Vulnerability-Growth Nexus: Theory and Practice," Working Papers hal-03109383, HAL.
    • Handle: RePEc:hal:wpaper:hal-03109383
    Note: View the original document on HAL open archive server: https://hal.science/hal-03109383
    as

    Download full text from publisher

    File URL: https://hal.science/hal-03109383/document
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Guillaumont, Patrick & Jeanneney, Sylviane Guillaumont & Brun, Jean-Francois, 1999. "How Instability Lowers African Growth," Journal of African Economies, Centre for the Study of African Economies, vol. 8(1), pages 87-107, March.
    2. Levy, Daniel, 1995. "Capital Stock Depreciation, Tax Rules, and Composition of Aggregate Investment," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 21(1), pages 45-65.
    3. Ramey, Garey & Ramey, Valerie A, 1995. "Cross-Country Evidence on the Link between Volatility and Growth," American Economic Review, American Economic Association, vol. 85(5), pages 1138-1151, December.
    4. Jan Ditzen, 2018. "Estimating dynamic common-correlated effects in Stata," Stata Journal, StataCorp LP, vol. 18(3), pages 585-617, September.
    5. P. Guillaumont & L. Chauvet, 2001. "Aid and Performance: A Reassessment," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 66-92.
    6. Alexander Chudik & Kamiar Mohaddes & M. Hashem Pesaran & Mehdi Raissi, 2013. "Debt, inflation and growth robust estimation of long-run effects in dynamic panel data models," Globalization Institute Working Papers 162, Federal Reserve Bank of Dallas.
    7. Boucekkine, Raouf & Pintus, Patrick A. & Zou, Benteng, 2018. "Mean growth and stochastic stability in endogenous growth models," Economics Letters, Elsevier, vol. 166(C), pages 18-24.
    8. Sosso FEINDOUNO & Michaël GOUJON, 2016. "The retrospective economic vulnerability index, 2015 update," Working Papers P147, FERDI.
    9. M. Hashem Pesaran, 2015. "Testing Weak Cross-Sectional Dependence in Large Panels," Econometric Reviews, Taylor & Francis Journals, vol. 34(6-10), pages 1089-1117, December.
    10. Monga, Celestin & Lin, Justin Yifu (ed.), 2015. "The Oxford Handbook of Africa and Economics: Volume 1: Context and Concepts," OUP Catalogue, Oxford University Press, number 9780199687114.
    11. Barry P. Bosworth & Susan M. Collins, 2003. "The Empirics of Growth: An Update," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2), pages 113-206.
    12. Julian Thimme, 2017. "Intertemporal Substitution In Consumption: A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 31(1), pages 226-257, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Patrick Guillaumont, 2009. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Oxford Development Studies, Taylor & Francis Journals, vol. 37(3), pages 193-228.
    2. Patrick Guillaumont, 2010. "Assessing the Economic Vulnerability of Small Island Developing States and the Least Developed Countries," Journal of Development Studies, Taylor & Francis Journals, vol. 46(5), pages 828-854.
    3. Patrick GUILLAUMONT, 2007. "EVI and its Use. Design of an Economic Vulnerability Index and its Use for International Development Policy," Working Papers 200714, CERDI.
    4. Patrick Guillaumont, 2010. "Assessing the Economic Vulnerability of Small Island Developing States and Least Developed Countries," Post-Print hal-00594797, HAL.
    5. Patrick Guillaumont, 2011. "Aid effectiveness for poverty reduction:macroeconomic overview and emerging issues," CERDI Working papers halshs-00554285, HAL.
    6. Patrick GUILLAUMONT, 2001. "Ouverture, vulnérabilité et développement," Working Papers 200103, CERDI.
    7. Catherine KORACHAIS & Patrick GUILLAUMONT, 2008. "When unstable, growth is less pro poor," Working Papers 200827, CERDI.
    8. Ms. Era Dabla-Norris & Ms. Camelia Minoiu & Luis-Felipe Zanna, 2010. "Business Cycle Fluctuations, Large Shocks, and Development Aid: New Evidence," IMF Working Papers 2010/240, International Monetary Fund.
    9. Mohaddes, Kamiar & Raissi, Mehdi, 2017. "Do sovereign wealth funds dampen the negative effects of commodity price volatility?," Journal of Commodity Markets, Elsevier, vol. 8(C), pages 18-27.
    10. Patrick GUILLAUMONT, 2009. "Aid effectiveness for poverty reduction: macroeconomic overview and emerging issues," Working Papers P05, FERDI.
    11. Dehn, Jan, 2000. "The effects on growth of commodity price uncertainty and shocks," Policy Research Working Paper Series 2455, The World Bank.
    12. Patrick GUILLAUMONT, 2000. "On the Economic Vulnerability of Low Income Countries," Working Papers 200016, CERDI.
    13. Jan Dehn, 2000. "Commodity Price Uncertainty and Shocks: Implications for Economic Growth," Economics Series Working Papers WPS/2000-10, University of Oxford, Department of Economics.
    14. Guillaumont, Patrick & Laajaj, Rachid, 2006. "When instability increases the effectiveness of aid projects," Policy Research Working Paper Series 4034, The World Bank.
    15. Lisa Chauvet & Marin Ferry & Patrick Guillaumont & Sylviane Guillaumont Jeanneney & Sampawende J.-A. Tapsoba & Laurent Wagner, 2019. "Volatility widens inequality. Could aid and remittances help?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 155(1), pages 71-104, February.
    16. Patrick Guillaumont, 2011. "EVI and its Use. Design of an Economic Vulnerability Index and its Use for International Development Policy," CERDI Working papers halshs-00557091, HAL.
    17. Rabeya Khatoon & Md Emran Hasan & Md Wahid Ferdous Ibon & Shahidul Islam & Jeenat Mehareen & Rubaiya Murshed & Md Nahid Ferdous Pabon & Md. Jillur Rahman & Musharrat Shabnam Shuchi, 2022. "Aggregation, asymmetry, and common factors for Bangladesh’s exchange rate–trade balance relation," Empirical Economics, Springer, vol. 62(6), pages 2739-2770, June.
    18. Chakraborty, Saptorshee Kanto & Mazzanti, Massimiliano, 2020. "Energy intensity and green energy innovation: Checking heterogeneous country effects in the OECD," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 328-343.
    19. Jean-Louis COMBES & Patrick GUILLAUMONT, 2000. "Volatilité des prix des produits primaires, vulnérabilité et développement," Working Papers 200014, CERDI.
    20. Patrick Guillaumont, 2011. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," CERDI Working papers halshs-00554328, HAL.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-03109383. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.