The Empirical Link Between Financial Globalization and Macroeconomic Volatility in Sub-Saharan African Countries

This study examines and compares the macroeconomic volatility impacts of overall financial globalization with those of de facto and de jure financial globalization in 39 Sub-Saharan African (SSA) countries from 2000 to 2023, using the PCSE and 2SGMM. The empirical results show that macroeconomic volatility responds differently to overall, de facto, and de jure measures of financial globalization. Additionally, the study demonstrates that fiscal balance, central government debt, population growth rate, leading export commodity price changes, and institutional quality can influence macroeconomic volatility. Resultantly, the study recommends global financial integration should be optimized to achieve macroeconomic stability in SSA countries.