Discussion Paper
No. 2016-47 | November 24, 2016
Fiseha Haile
Global Shocks and their Impact on the Tanzanian Economy

Abstract

Plummeting commodity prices, China’s economic malaise, and global financial market turbulence have recently wreaked havoc on African economies. This paper investigates whether, and to what extent, these intertwined shocks spillover into the Tanzanian economy. The author finds that a 1 percentage point (ppts) drop in China’s investment growth is associated with a decline in Tanzania’s export growth of roughly 0.60 ppts. A 1 percent fall in commodity prices leads to 0.65 percent lower exports value. The results suggest that a hard landing of the Chinese economy to its ‘new normal’ would doubtless send shock waves through the Tanzanian economy by further driving down commodity demand and prices as well as lowering development finance. In contrast, financial market volatility has a fairly negligible impact on economic growth. The main results stand up well to a wide-array of robustness checks.

Data Set

JEL Classification:

C32, F4, O11

Links

Cite As

[Please cite the corresponding journal article] Fiseha Haile (2016). Global Shocks and their Impact on the Tanzanian Economy. Economics Discussion Papers, No 2016-47, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2016-47


Comments and Questions



Anonymous - Referee Report 1
January 09, 2017 - 08:07
see attached file

Fiseha Haile - Reply to Referee Report 1
January 24, 2017 - 08:49
see attached file

Wing-Keung Wong - A Note on "Global Shocks and their Impact on the Tanzanian Economy"
January 31, 2017 - 08:08
see attached file

Fiseha Haile - Reply to Wing-Keung Wong
February 06, 2017 - 08:37
see attached file