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Macroeconomic effects of falling commodity price: Evidence from Democratic Republic of the Congo

PINSHI, Christian P. (2018): Macroeconomic effects of falling commodity price: Evidence from Democratic Republic of the Congo.

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Abstract

This paper assesses the shock impact of commodity prices on the macroeconomic framework in the Democratic Republic of the Congo. Using a Vector autoregressive (VAR) model, we determine the impulses of each macroeconomic sector to lower prices. The results indicate that this shock leads to complex effects that can lead to systemic risks and crises. We suggest that it would be important for governments, given such shocks, to learn from and take immediate action to strengthen the resilience of the economy and the financial system to future shocks in based.

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