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Current account sustainability in Sub-Saharan Africa: Does the exchange rate regime matter?

Listed author(s):
  • Gnimassoun, Blaise
  • Coulibaly, Issiaka

This paper aims at studying the sustainability of current accounts in Sub-Saharan Africa and determining whether this sustainability depends on the exchange rate regime. Relying on a formal theoretical framework and recent panel cointegration techniques, our findings show that current accounts have been globally sustainable in Sub-Saharan Africa countries over the 1980–2011 period. However, this sustainability has been lower for countries operating a fixed exchange rate regime or belonging to a monetary union. We also find that the difference in the level of sustainability could be explained by a higher persistence in the current account adjustment of countries operating under rigid exchange rate regimes.

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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 40 (2014)
Issue (Month): C ()
Pages: 208-226

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Handle: RePEc:eee:ecmode:v:40:y:2014:i:c:p:208-226
DOI: 10.1016/j.econmod.2014.04.017
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30411

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