Call for Proposals: Macroeconomic Policy and Growth in Africa

AERC encourages female researchers and those from fragile and post-conflict countries to apply.

Themes

• The proposed research themes include, but are not necessarily limited to the following:
  • Does the mode of financing of the budget deficit matter for inflation?
    • The government may finance the budget deficit with a combination of direct advances from the Central Bank, Treasury bills/bonds issues, external borrowing, development assistance, etc. Do these methods of financing have similar implications for inflation? For example, is bill/bond financing less inflationary than direct advances from the Central Bank? A study on this theme can draw on the broader context of the literature on determinants of inflation and specifically the inflation-deficit nexus.
  • Public vs. private domestic credit and inflation
    • High borrowing by the government, and the public sector broadly, can fuel inflation. Is private sector borrowing different? Is borrowing by state-owned enterprises different from borrowing by the central government and the private sector in terms of the effects on inflation? Issues of crowding out and efficiency in allocation/use of the credit can be explored under this theme.
  • What are the effects of commodity prices on inflation in commodity?
    • Both commodity exporters and importers are affected by dynamics in international commodity prices (booms and busts) but in various ways.
  • Producing countries and commodity importing countries?
    • Commodity prices affect domestic prices, creating challenges to policies aimed at controlling inflation.
  • Implications of foreign Exchange management and inflation
    • In countries outside fixed-exchange rate zones (monetary unions), governments face the challenge of shielding domestic prices from exchange rate shocks and keeping a competitive market-determined exchange rate. Country experiences vary. Issues to investigate under this theme could include: passthrough of international prices to domestic inflation; inflation-depreciation nexus; inflation-exchange rate premium linkages; how traders react to/cope with foreign exchange controls/shortages; etc.
  • Implications of domestic borrowing for debt sustainability and growth
    • Over the past two decades, African countries have rapidly accumulated both external and domestic debt. Attention has predominantly been focused on external borrowing. Is domestic debt accumulation an issue? What are the implications of domestic debt accumulation for debt sustainability, domestic capital market development, crowding out of private sector borrowing, and private investment?
  • Why do resource-rich countries generate so little tax revenue?
    • A detailed study of the tax structure, including composition/sources of tax and non-tax revenue may shed light on efficiency (or lack of) of the tax system in resource-rich countries in mobilizing domestic revenue. Issues to investigate include resource contract design, enforcement capacity, tax treaties (e.g., many bilateral tax treaties date from the colonial era!), leakages of tax revenue, tax evasion (notably by MNCs), etc.
  • Fiscal policy and poverty reduction
    • This would entail examining how government expenditures (level and allocation), government revenue, and tax policy affect poverty or help to address poverty, income distribution and inequality.
  • Commodity prices and government spending
    • A study on this theme would involve looking from a historical (time series) perspective at how international commodity prices affect government spending may help explain why commodity dependent countries are “locked” into the commodity dependence.
  • Sustainability of fiscal consolidation efforts in SSA and the COVID-19 Pandemic
    • Studies under this theme could contribute to the debate on the risks that the Covid-19 pandemic will erode the gains from effort at fiscal consolidation undertaken before the crisis.
  • Vulnerability of African Economies to COVID-19
    • Has Covid-19 increased the vulnerability of African economies? How can the pandemic be incorporated in analyzing vulnerability, including in the construction of economic vulnerability indexes?

Funding Information

• Researchers whose proposals have been accepted receive a research grant ranging between USD9000-USD12000 and intense mentoring by world-class researchers with extensive expertise in macroeconomics, development economics, econometrics, and related disciplines.

For more information, visit AERC.