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Explaining Differences in Income Levels of Africa’s Largest Economies – A Development Accounting Perspective

Oyakhilome Ibhagui

International Journal of Development and Conflict2019article
ABDC B
Weight
0.26

Abstract

Drawing upon the experience of Africa’s largest economies, this paper examines the phenomenon of income discrepancies in Africa and applies the combined methodologies of Development Accounting (DA) à la Caselli (2005) and Business Cycle Accounting (BCA) à la Chari, Kehoe and McGrattan (2007) in a standard neoclassical, small open economy model. Classified into 2 equal-numbered groups – G1 and G2 – based on output size and region of location, the economies comprise Sub-Saharan Africa’s top 3 economies (G1: Nigeria, South Africa and Angola), and North Africa’s top 3 economies (G2: Egypt, Algeria and Morocco). Distortions in production efficiency, labour and capital, collectively termed wedges, are calculated, and the extent, evolution and impact of the wedges are determined for the period 1990 to 2013. Empirical results show that although efficiency wedge plays an important role in explaining income differences, labour wedge and investment wedge are also important for understanding income differences in Africa and, by extension, bridging the gap.

Cite this paper

@article{oyakhilome2019,
  title        = {{Explaining Differences in Income Levels of Africa’s Largest Economies – A Development Accounting Perspective}},
  author       = {Oyakhilome Ibhagui},
  journal      = {International Journal of Development and Conflict},
  year         = {2019},
}

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Explaining Differences in Income Levels of Africa’s Largest Economies – A Development Accounting Perspective

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Evidence weight

0.26

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.00 × 0.4 = 0.00
M · momentum0.20 × 0.15 = 0.03
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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