Problem 4: Consider the Economist Intelligence Unit's forecast update AfCFTA agreement comes into force after pandemic delays
Question:
Problem 4: Consider the Economist Intelligence Unit's forecast update "AfCFTA agreement comes into force after pandemic delays" of the current and future benefits of the recently imple- mented African Continental Free-Trade Area (AfCFTA) agreement.* a) In the article, what is the expectation about the timing of total factor productivity benefits from the AfCFTA agreement? b) To what extent could the expectations about AfCFTA agreement benefits affect current investment, including public infrastructure? c) What would be the most likely effects on Sierra Leone's current account balance regarding current aggregate saving and current aggregate investment, CA = S I. You can assume that Sierra is a small open economy in the international funds market. d) Does your answer in c) depend on whether households are myopic or forward-looking? Briefly explain.