IDEAS home Printed from https://ideas.repec.org/a/eee/deveco/v66y2001i1p199-223.html
   My bibliography  Save this article

Modelling macroeconomic shocks in the CFA Franc Zone

Author

Listed:
  • Fielding, David
  • Shields, Kalvinder

Abstract

In this paper we modify the method of Blanchard and Quah (1989) in order to estimate a structural VAR model appropriate for a small open economy. In this way we identify shocks to output and prices in the members of the two monetary unions that make up the African CFA Franc Zone. The costs of monetary union membership will depend on the extent to which price and output shocks are correlated across countries, and the degree of similarity in the long run effects of the shocks on the macro-economy. The policy conclusions depend on the relative importance of different macroeconomic variables to policymakers, and the speed with which a policymaker is able to respond to a shock.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Fielding, David & Shields, Kalvinder, 2001. "Modelling macroeconomic shocks in the CFA Franc Zone," Journal of Development Economics, Elsevier, vol. 66(1), pages 199-223, October.
  • Handle: RePEc:eee:deveco:v:66:y:2001:i:1:p:199-223
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304-3878(01)00161-4
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Blanchard, Olivier Jean & Quah, Danny, 1989. "The Dynamic Effects of Aggregate Demand and Supply Disturbances," American Economic Review, American Economic Association, vol. 79(4), pages 655-673, September.
    2. Yeats, Alexander J, 1990. "On the Accuracy of Economic Observations: Do Sub-Saharan Trade Statistics Mean Anything?," World Bank Economic Review, World Bank Group, vol. 4(2), pages 135-156, May.
    3. Barro, Robert J. & Gordon, David B., 1983. "Rules, discretion and reputation in a model of monetary policy," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 101-121.
    4. Diep Nuven, 1994. "Linkages in Price Level and Inflation Rate Between Cfa Franc Zone Countries and France," IMF Working Papers 94/93, International Monetary Fund.
    5. Shantayanan Devarajan & Dani Rodrik, 1991. "Do the Benefits of Fixed Exchange Rates Outweigh Their Costs? The Franc Zone in Africa," NBER Working Papers 3727, National Bureau of Economic Research, Inc.
    6. Jonathan David Ostry & Anne Marie Gulde & Atish R. Ghosh & Holger C. Wolf, 1995. "Does the Nominal Exchange Rate Regime Matter?," IMF Working Papers 95/121, International Monetary Fund.
    7. Bruno, Michael & Easterly, William, 1998. "Inflation crises and long-run growth," Journal of Monetary Economics, Elsevier, vol. 41(1), pages 3-26, February.
    8. Tornell, Aaron & Velasco, Andres, 1995. "Fiscal discipline and the choice of exchange rate regime," European Economic Review, Elsevier, vol. 39(3-4), pages 759-770, April.
    9. Fielding, David & Bleaney, Michael, 2000. "Monetary Discipline and Inflation in Developing Countries: The Role of the Exchange Rate Regime," Oxford Economic Papers, Oxford University Press, vol. 52(3), pages 521-538, July.
    10. Atish R. Ghosh, 1998. "Currency Boards; The Ultimate Fix?," IMF Working Papers 98/8, International Monetary Fund.
    11. Fischer, Stanley, 1993. "The role of macroeconomic factors in growth," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 485-512, December.
    12. Fielding, David, 1996. "Asymmetries in the Behaviour of Members of a Monetary Union: A Game-Theoretic Model with an Application to West Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 5(3), pages 343-365, October.
    13. Lowrey, Michael P, 1995. "France and the CFA: Price and Money Supply Growth Determination: 1969-88," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 4(2), pages 225-242, October.
    14. Stasavage, David, 1997. "The CFA Franc Zone and Fiscal Discipline," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 6(1), pages 132-167, March.
    15. Boccara, Bruno & Devarajan, Shantayanan, 1993. "Determinants of inflation among franc zone countries in Africa," Policy Research Working Paper Series 1197, The World Bank.
    16. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
    17. Allechi, M'Bet & Niamkey, Madeleine A., 1994. "Evaluating the net gains from the CFA Franc Zone membership: A different perspective," World Development, Elsevier, vol. 22(8), pages 1147-1160, August.
    18. Michel Galy & Michael T. Hadjimichael, 1997. "The CFA Franc Zone and the EMU," IMF Working Papers 97/156, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:66:y:2001:i:1:p:199-223. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/devec .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.