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Can Intra-Regional Trade Act as a Global Shock Absorber in Africa?

Author

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  • Brixiova, Zuzana

    (UNECA)

  • Meng, Qingwei

    (African Development Bank)

  • Ncube, Mthuli

    (University of Oxford)

Abstract

The global financial crisis and the subsequent uneven recovery have underscored the need for Africa's resilience to output and other shocks originated in the rest of the world. A comparison of two regional economic communities – the East African Community (EAC) and the Southern Africa Customs Union (SACU) – suggests that deeper intra-regional, and in particular intra-industry, trade ties have contributed to the EAC's resilience to external output shocks. More broadly, intra-regional and intra-African trade with fast-growing economies, together with geographically diversified trade links, can strengthen the capacity of African countries to absorb global output shocks. Besides helping shield countries from external shocks, intra-regional trade also supports economic diversification and participation in regional value chains.

Suggested Citation

  • Brixiova, Zuzana & Meng, Qingwei & Ncube, Mthuli, 2015. "Can Intra-Regional Trade Act as a Global Shock Absorber in Africa?," IZA Discussion Papers 9205, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9205
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    References listed on IDEAS

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    Cited by:

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    2. Stanley, Abban, 2020. "The prospect of the proposed Currency Union on intra-regional trade in East African Community," MPRA Paper 100512, University Library of Munich, Germany.
    3. Oyenyinka Sunday Omoshoro‐Jones & Lumengo Bonga‐Bonga, 2022. "Intra‐regional spillovers from Nigeria and South Africa to the rest of Africa: New evidence from a FAVAR model," The World Economy, Wiley Blackwell, vol. 45(1), pages 251-275, January.
    4. McKenzie, Rex A, 2015. "Monetary transmission in Africa: a review of official sources," Economics Discussion Papers 2015-7, School of Economics, Kingston University London.
    5. Abban, Stanley, 2020. "The Prospect of the Proposed Currency Union on Intra-regional Trade: Southern African Customs Union," MPRA Paper 103123, University Library of Munich, Germany.
    6. Xiuping Ji & Feiran Dong & Chen Zheng & Naipeng Bu, 2022. "The Influences of International Trade on Sustainable Economic Growth: An Economic Policy Perspective," Sustainability, MDPI, vol. 14(5), pages 1-15, February.

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    More about this item

    Keywords

    Africa; output co-movement; intra-regional trade; regional economic communities;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F15 - International Economics - - Trade - - - Economic Integration

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