INSTABILITY IN TRADE-FLOWS AS A CAUSE OF ECONOMIC STAGNATION IN AFRICA - AN ERROR-CORRECTION TEST

This paper identifies export instability as an additional cause of cha nges in GDP. Instability is measured by deviations of exports from the ir trend values, A multivariate error-correction model that incorporat es export instability is tested on individual time series data (1967-1 990) for twenty-one African countries, The results indicate reduction in export-earnings but not any significant decline in GDP growth due t o instability. Half of these countries experienced export-to-growth ca usality, with a reverse causality in three-fourths of them. The result s are sensitive to both the omission of variables and the test procedu re used.