On Inclusive Growth: An Economic Growth Time-Frequency Analysis of the Democratic Republic of Congo from 1975-2016

Abstract

This paper focuses on fluctuations in the inclusiveness of economic growth (in terms of its participatory aspect) in the Democratic Republic of Congo at different time scales. We investigate the extent to which variations in economic growth are explained by variations in the unemployment rate, the agricultural sector, and the mining sector, using an econometric model known as Auto-Regressive Distributed Lag model which will give us both short and long-term impulse responses in order to identify the dynamics of our variables (endogenous and exogenous). In the same vein, we show that the development of a structural economic policy is imperative to overcome the problem of the non-resilience of the Congolese economy, in particular through the promotion of growth-catalyzing sectors in order to generate more wealth to be equitably redistributed to each segment of the Congolese population as well as to the pro-poor sectors. Moreover, knowing that the Congolese economy has been confronted with multiple shocks (supply and demand) to the point of damaging its sustainability, the information contained in the fluctuations of economic growth informs us about the state of inclusive growth in its entirety relative to the interference of the Congolese state. Thus, the cyclical movements of economic growth are extracted using a multi-resolution analysis (or wavelet decomposition) that spreads a time series at different levels of resolution.