An Analysis of Cycle Magnitude and Its Impacts on Sudanese Economy 1970-2000

Abstract

This study entitled the cycle magnitude and its impacts on the Sudanese economy during period 1970- 2000. The cycle magnitude measures by the deviation of national income from its steady growth path. The study suggests some variables to define the problem of the study. Those variables are investment, saving, payment balance, budget deficit, state of technology, and the set of the policies which were implemented during target period. The study targeted to introduce new interpretation to the issue of cycle magnitude by incorporating the above variables. Furthermore the study targeted at evaluating different policy measures which were implemented during the target period. Such evaluation bases on the effectiveness of the policy in tackling the problem. The study hypotheses that, any improvement in the explanatory variables will reduce the cycle volume and hence the income disturbance. The study used econometric methodology in analysing the data concerning the target period. The results are that, investment is stabilized variable to the cycle magnitude or income disturbances. Also the results proved that any improvement in the position of the payment balance budget deficit, the cycle magnitude or income disturbance will reduce significantly. Also the results revealed that, the import substitution policy which implemented during the period 1971- 1978 stabilized policy while the tight monetary which implement during the period 1992- 2000 is destabilized policy. Finally, the study reached a conclusion that, the Sudanese economy is very vulnerable to structural factors like the foreign sector and budget sector and the recommendations were basically depended upon the improving those sectors in order to reduce the disturbance in the national income or cycle magnitude. As far as the policy measures the study recommended that the usage ofany policy depending upon the state of the economy is depression, recession or inflation.