The impact of business cycles on economic growth in North African countries: dynamic panel data

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Abstract

This study examines how business cycles impact economic growth in African countries using dynamic panel data analysis with the Generalized Method of Moments (GMM). The research utilizes comprehensive World Bank data spanning from 1990 to 2022, focusing on key economic factors such as inflation, foreign direct investment (FDI), exchange rates, and the far-reaching effects of the COVID-19 pandemic. The analysis reveals that both business cycles and economic growth have a positive influence on GDP per capita, though the impacts differ significantly across various regions of Africa. Inflation and COVID-19 emerge as significant variables contributing to economic fluctuations, emphasizing their disruptive effects on long-term growth patterns. Additionally, the study highlights how regional disparities and external shocks, including pandemics, have distinct consequences for economic resilience. The findings provide crucial insights for policymakers aiming to stabilize economies during periods of heightened volatility and uncertainty, promoting sustainable growth in the process. By deepening the understanding of how business cycles and economic growth are interconnected, governments across Africa can implement more effective strategies to mitigate the adverse effects of economic downturns while capitalizing on opportunities for growth. Ultimately, this research underlines the importance of considering external shocks in developing long-term economic policies.

About the authors

Abdullahi Sule Sani

Universitas Sebelas Maret UNS
Saadatu Rimi University of Education

Author for correspondence.
Email: sanisule101@gmail.com

PhD Candidate Economic and Business

11KM Zaria Road, Kano, Nigeria

Hakim Lukman

Universitas Sebelas Maret UNS

Email: lukkim@gmail.com

PhD Candidate Economic and Business

57126, Jalan Ir. Sutami 36 Kentingan, Jebres, Surakarta, Jawa Tengah, Indonesia

Rawidyo Putro Tetuko

Universitas Sebelas Maret UNS

Email: tetuko97@yahoo.com

PhD Candidate Economic and Business

57126, Jalan Ir. Sutami 36 Kentingan, Jebres, Surakarta, Jawa Tengah, Indonesia

Pamungkas Putra

Universitas Sebelas Maret UNS

Email: putra.pamungkas@staff.uns.ac.id

PhD Candidate Economic and Business

57126, Jalan Ir. Sutami 36 Kentingan, Jebres, Surakarta, Jawa Tengah, Indonesia

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