Do exchange rate misalignments really affect economic growth? The case of Sub-Saharan African countries

Ferdinand Owoundi

International Economics, 2016, vol. 145, issue C, 92-110

Abstract: In order to shed light on the debate concerning the exiting of the Franc Zone area, we address the issue of the growth effects of currency misalignments in Sub-Saharan African countries. To this end, we first assess misalignments which we include in a growth equation while taking into account uncertainty and “jointness” between growth determinants using recent Bayesian inference techniques. More specifically, exchange rate regimes, as well as cross-sectional error dependence, will be explored. We thus demonstrate that the gain related to undervaluation is almost zero regardless of the exchange rate regime.

Keywords: Misalignments; Growth; Bayesian inference; Cross-sectional dependence (search for similar items in EconPapers)
JEL-codes: C51 F31 O47 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (11)

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Journal Article: Do exchange rate misalignments really affect economic growth? The case of Sub-Saharan African countries (2016)
Working Paper: Do exchange rate misalignments really affect economic growth? The case of Sub-Saharan African countries (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inteco:v:145:y:2016:i:c:p:92-110

DOI: 10.1016/j.inteco.2015.10.001

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