A number of African economies have highly concentrated export and import sectors. Moreover, their export revenues are highly unstable due to recurrent and sharp variations in the prices of main export goods. This paper examines the role of external shocks, which are represented by fluctuations...

This paper identifies factors that contribute to a fast recovery in growth after persistent negative terms of trade shocks, using a sample of 159 countries for 1970-2006. The results suggest that policies matter. Fast recoveries are fairly robustly related to real exchange rate depreciation and...

Empirical evidence for small developed economies finds that consumption is procyclical and as volatile as output, and real net exports are coutercyclical. Earlier studies have not been able to reproduce these regularities in a DSGE small open economy model when productivity shocks drive the...