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Currency Devaluation as a Source of Growth in Africa: A Synthetic Control Approach

Author

Listed:
  • Florence Bouvet

    (Sonoma State University)

  • Roy Bower

    (Furman University)

  • Jason C. Jones

    (Furman University)

Abstract

This study examines the impact of the 1994 IMF-supported CFA franc devaluation on GDP per capita in the CFA-franc zone using the augmented synthetic control methodology. With the exception of Mali, there is no statistical evidence that GDP per capita levels rose relative to what they would have been in the absence of the IMF-supported devaluation. Three countries record statistically significant GDP per capita levels below the counterfactual following the devaluation, though these countries experienced a deterioration of their national institutional environment or were affected by external factors that offset any potential gains from the devaluation.

Suggested Citation

  • Florence Bouvet & Roy Bower & Jason C. Jones, 2022. "Currency Devaluation as a Source of Growth in Africa: A Synthetic Control Approach," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 48(3), pages 367-389, June.
    • Handle: RePEc:pal:easeco:v:48:y:2022:i:3:d:10.1057_s41302-022-00211-4
    DOI: 10.1057/s41302-022-00211-4
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    Cited by:

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    2. Bilbao-Goyoaga, Eugenia, 2023. "Perceptions Matter: Quasi-Experimental Evidence on the Effects of Minimum Income on Objective and Subjective Financial Wellbeing in Spain," SocArXiv wv7xt, Center for Open Science.

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    More about this item

    Keywords

    Currency devaluation; Augmented synthetic control method; CFA monetary union;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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