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Exchange rate regimes and economic performance: Does CFA zone membership benefit their economies?

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  • Coulibaly, Issiaka
  • Davis, Junior

Abstract

This paper aims to evaluate the importance and impact of CFA zone membership by distinguishing between the effects of being in monetary union from those which arose from anchoring the CFA franc. Using de jure and de facto regime classification schemes and a sample of 35 SSA countries over the 1985-2009 period, our results show that the CFA zone membership has been beneficial in terms of inflation, while it has not resulted in a significant effect on growth. Finally, we evidence that greater fiscal discipline can be associated with peg regimes in SSA, but not necessarily with monetary union.

Suggested Citation

  • Coulibaly, Issiaka & Davis, Junior, 2013. "Exchange rate regimes and economic performance: Does CFA zone membership benefit their economies?," MPRA Paper 54075, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:54075
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    File URL: https://mpra.ub.uni-muenchen.de/54075/1/MPRA_paper_54075.pdf
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    References listed on IDEAS

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    Cited by:

    1. Issiaka Coulibaly, 2014. "Competitiveness and growth within the CFA franc zone: Does the switch to the Euro matter?," International Economics, CEPII research center, issue 139, pages 1-18.

    More about this item

    Keywords

    Exchange rate management; CFA; monetary zones;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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