Business Cycle Accounting in 21st Century Angola

The aim of this dissertation is to analyse business-cycle fluctuations in 21st Century Angola, using quarterly data from 2002:I to 2022:IV. For that purpose, I use the Business Cycle Accounting (BCA) approach to estimate the time-varying wedges that separate actual data from artificial data produced by a frictionless model. I conclude that the investment wedge exhibits the best performance for output, followed by government and efficiency wedges. In addition, I also conclude that government wedge exhibits the best performance for investment and hours worked, followed by investment wedge (for investment) and efficiency wedge (for hours worked). Additionally, I divide the analysis into four sub-periods: expansion (2002:I – 2008:IV), stagnation (2009:I – 2014:II), crisis (2014:III – 2019:IV), and the pandemic (2020:I – 2022:IV). The results show that the investment wedge performs best during expansion, the efficiency wedge dominates during stagnation and the pandemic period, and the government wedge plays the most significant role during crises.