Dee-M123/Africa-Economic-Banking-and-Systemic-Crisis

📊 **Macroeconomic Conditions & Sovereign Default Risk** **Research Question:** **What macroeconomic conditions increase sovereign default risk?** 1️⃣ **Project Overview** This project examines the relationship between macroeconomic instability and sovereign default risk using descriptive statistical analysis. The analysis focuses on inflation dynamics, crisis indicators, and historical instability patterns. 2️⃣ **Data Source** **The dataset is sourced from Kaggle:** Africa Economic, Banking and Systemic Crisis Data Africa Economic and Crisis… The dataset compiles historical macroeconomic and crisis-related indicators across multiple African countries. 3️⃣ **Data Structure** The dataset is structured as a panel dataset, meaning: - Multiple countries - Observed across multiple years - Each row represents a country-year observation **Key Variables Used** - inflation_annual_cpi → Annual CPI inflation rate - sovereign_external_debt_default → Binary indicator (0 = No Default, 1 = Default) - banking_crisis → Banking crisis indicator - year → Time dimension This structure allows cross-country and time-series descriptive comparisons. 4️⃣ **Data Cleaning & Preparation** To ensure analytical quality: - Missing values were reviewed and handled appropriately - Variable types were validated - Binary crisis indicators were confirmed (0/1 format) - Inflation outliers were identified using the Interquartile Range (IQR) method **Data was analyzed under three conditions**: - Full dataset - Normal inflation observations - Inflation outlier observations 5️⃣ **Analytical Approach** Because the project focuses on descriptive statistics, the following techniques were applied: - Correlation analysis - Grouped mean comparison - Crisis probability calculation - Time-period aggregation - Data visualization using Matplotlib / Seaborn No predictive modeling or causal inference was performed. …