Hypothèse de Thirlwall: cas des pays de la zone Franc
[Thirlwall’s hypothesis : the case of countries of the Franc Zone]
AbstractThe purpose of this study is to test the hypothesis of Thirlwall (1979) for the countries of the Franc Zone. These countries share in common the fixed parity of their currencies against the euro. One issue that concerns most of these countries is the current account deficit. By applying the cointegration bounds test of Pesaran et al. (2001) to annual data (1970-2006), the study shows that Thirlwall's hypothesis is verified for at least 11 of the 15 countries of the Franc Zone. This result raises the question of the effectiveness of current account deficits recorded by these countries and suggests that expansionary monetary policy, strategies for export growth, reevaluation of the CFA franc against the euro would help to relax the constraint of balance of payments on demand and thus accelerate economic growth without damaging the current account in the Franc Zone.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 29990.
Date of creation: 31 Mar 2011
Date of revision:
Thirlwall’s hypothesis; Balance of payments constrained growth rate; cointegration bounds test; Franc Zone;
Find related papers by JEL classification:
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
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