South Sudan Secession Sparks Economic Instability and Political Unrest
The article models the economic impact of South Sudan's split into two countries. It shows that political stability is crucial for asset markets and foreign currency reserves. If political unrest continues, both countries may see their reserves decline, leading to currency depreciation and inflation. Governments may need to switch to flexible exchange rates, causing further economic instability. Cooperation between the two countries is essential to avoid economic turmoil after the split.