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

Blaise Gnimassoun and Issiaka Coulibaly (coul_issiak@yahoo.fr)

Economic Modelling, 2014, vol. 40, issue C, 208-226

Abstract: 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.

Keywords: Current account; Exchange rate regime; Panel cointegration tests; Sub-Saharan Africa (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (27)

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Working Paper: Current account sustainability in Sub-Saharan Africa: Does the exchange rate regime matter? (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:40:y:2014:i:c:p:208-226

DOI: 10.1016/j.econmod.2014.04.017

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