Abstract
<p><em>This paper analyzes the effects of oil and cotton price shocks on Burkina Faso economic growth using a multivariate VAR model estimation. We have distinguished between the linear and nonlinear specification of oil and cotton price shocks in our study. For the nonlinear specification, we make the difference between prices increase and price decreases. We find</em><em> </em><em>that oil price shocks do not affect Burkina Faso’s real GDP in both linear and nonlinear specification. However, we do find that cotton price shocks in linear and nonlinear model, Granger cause real GDP and final consumption. In addition, the study has shown that both positive and negative cotton price shocks affect positively the real GDP.</em><em></em></p>
Highlights
The effect of raw materials’ price on macroeconomic variables has been widely studied by economists
The main particularity of this study is that, it analyzes the effect of import input price shocks and the effect of export input price shocks on net importer country economy
The real GDP has been used as economic growth indicator, and cotton price and oil price are the input price considered in this study
Summary
The effect of raw materials’ price on macroeconomic variables has been widely studied by economists. Those studies have been done mostly in developed countries or in developing oil exporter countries. Developing countries importers and exporters of raw materials can be concerned by those studies for knowing the global effect of import and export inputs price on their macroeconomic variables. Those countries are most concerned about this question since they are essentially price taker of those inputs. An input-importer country an input price increase such http://www.scholink.org/ojs/index.php/se
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