Preliminary draft Macroeconomic Shock Transmission in the East African Community: A GVAR Approach
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چکیده
We develop a global vector autoregressive model GVAR to analyze macroeconomic shock transmission among the East African Community countries. The results suggest that there is a signi cant growth and ination shock transmissions from Kenya to the rest of the member countries while the transmission in the opposite direction is insigni cant. The macroeconomic shocks are reected more on prices than output. In terms of the magnitudes, a percentage point increase in Kenyas ination rate could lead to 0.05 (Rwanda) to 0.35 (Uganda & Tanzania) percentage point increase in ination rate. The results indicate the signi cant role of Kenya in terms of managing macroeconomic stability in the bloc. JEL Classi cation: C32, C51, F42, F44
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