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The Characteristics of Macroeconomic Shocks in the CFA Franc Zone

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  • David Fielding
  • Kevin Lee
  • Kalvinder Shields

Abstract

In this paper we fit a VECM in output and prices to data from ten countries of the CFA Franc Zone. This model allows for various cross-country interactions in both the short run and the long run. The VECM parameters are used to estimate persistence profiles of different kinds, in order to identify the degree of homogeneity in the way in which the countries respond to macroeconomic shocks. In this way we can shed light on questions about the likely size of the costs incurred from these countries' membership of a monetary union.

Suggested Citation

  • David Fielding & Kevin Lee & Kalvinder Shields, 2004. "The Characteristics of Macroeconomic Shocks in the CFA Franc Zone," WIDER Working Paper Series RP2004-21, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:rp2004-21
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    6. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    7. Rosella Giacometti & Dino Pinelli, 1999. "Asymmetric Shocks and Long-Run Economic Performances across Italian Regions," Computing in Economics and Finance 1999 734, Society for Computational Economics.
    8. David Fielding & Kalvinder Shields, 2003. "Economic Integration in West Africa: Does the CFA Make a Difference?," Discussion Papers in Economics 03/8, Division of Economics, School of Business, University of Leicester.
    9. Lee, Kevin C & Pesaran, M Hashem & Pierse, Richard G, 1992. "Persistence of Shocks and Their," Economic Journal, Royal Economic Society, vol. 102(411), pages 342-356, March.
    10. Stasavage, David, 1997. "The CFA Franc Zone and Fiscal Discipline," Journal of African Economies, Centre for the Study of African Economies, vol. 6(1), pages 132-167, March.
    11. Michael Funke & Stephen Hall, 1998. "Aggregate demand and aggregate supply in UK regions," Journal of Economic Studies, Emerald Group Publishing, vol. 25(4), pages 260-276, September.
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    Cited by:

    1. Sampawende Jules Tapsoba, 2011. "Union Monétaire en Afrique de l'Ouest: Quelles Réponses à l'Hétérogénéité des Chocs ?," CERDI Working papers halshs-00554309, HAL.
    2. Sampawende Jules TAPSOBA, 2009. "Union Monétaire en Afrique de l’Ouest: Quelles Réponses à l’Hétérogénéité des Chocs ?," Working Papers 200912, CERDI.
    3. Sampawende Jules Tapsoba, 2011. "Union Monétaire en Afrique de l'Ouest: Quelles Réponses à l'Hétérogénéité des Chocs ?," Working Papers halshs-00554309, HAL.
    4. Elie Ndemba Tshilambu, 2022. "Politique budgétaire, Investissement privé et performance macroéconomique en République démocratique du Congo ," Post-Print hal-03627267, HAL.
    5. BIKAI, J. Landry & BATOUMEN M., Hardit & FOSSOUO, Armand, 2016. "Determinants of inflation in CEMAC: the role of money," MPRA Paper 89111, University Library of Munich, Germany.
    6. David Fielding & Kevin Lee & Kalvinder Shields, 2012. "Does one size fit all? Modelling macroeconomic linkages in the West African Economic and Monetary Union," Economic Change and Restructuring, Springer, vol. 45(1), pages 45-70, February.
    7. repec:ebl:ecbull:v:6:y:2007:i:25:p:1-15 is not listed on IDEAS
    8. Fabrizio Carmignani, 2010. "Endogenous Optimal Currency Areas: the Case of the Central African Economic and Monetary Community," Journal of African Economies, Centre for the Study of African Economies, vol. 19(1), pages 25-51, January.
    9. Mr. Jian-Ye Wang & Nisreen H. Farhan & Amar Shanghavi & Mr. Márcio Valério Ronci & Ms. Misa Takebe, 2008. "The Choice of Monetary and Exchange Rate Arrangements for a Small, Open, Low-Income Economy: The Case of São Tomé and Príncipe," IMF Working Papers 2008/118, International Monetary Fund.
    10. Ntita Ntita, Jean & Kazadi Ntita, François & Ntanga Ntita, Jean de Dieu, 2017. "Determinants De L'Inflation Dans Les Pays De La Communaute Economique Et Monetaire De L'Afrique Centrale, (Cemac) [Determinants Of Inflation In Central African Economic And Monetary Community (Caem," MPRA Paper 92902, University Library of Munich, Germany, revised Mar 2019.
    11. David Fielding & Kevin Lee & Kalvinder Shields, 2004. "Modelling Macroeconomic Linkages in a Monetary Union: A West African Example," WIDER Working Paper Series RP2004-22, World Institute for Development Economic Research (UNU-WIDER).
    12. Hénock Muanza Katuala, 2020. "Monetary Policy, Monetary Stability And Economic Growth In The Democratic Republic Of Congo [Politique Monetaire, Stabilite Monetaire Et Croissance Economique En Republique Democratique Du Congo]," Working Papers hal-02616124, HAL.

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