Macroeconomic uncertainty and growth: empirical evidence from Sudan economy (1956–2006)

The objective of this paper is to assess the role of macroeconomic uncertainty on growth via estimating volatility as a system composed of six macroeconomic variables i.e. real GDP per capita, money supply growth rate, government aggregate expenditure ratio to GDP, real exchange rate, and terms of trade. Estimated volatility by multivariate GARCH is used as proxy for uncertainty. Results indicate that uncertainty has been caused by volatility of macroeconomic variables, distortionary economic policies, government failures, and weak social institutions.