Revisiting the theory of optimum currency areas: Is the CFA franc zone sustainable?
Issiaka Coulibaly (),
David Guerreiro () and
Valérie Mignon ()
Working Papers from CEPII research center
This paper aims at explaining why the CFA countries have successfully maintained a currency union for several decades, despite failing to meet many of optimum currency area criteria. We suggest that the CFA zone, while not optimal, has been at least sustainable. We test this sustainability hypothesis by relying on the Behavioral Equilibrium Exchange Rate (BEER) approach. In particular, we assess and compare the convergence process of real exchange rates towards equilibrium for the CFA zone countries and a sample of other sub-Saharan African (SSA) countries. Our findings evidence that internal and external balances have been fostered and adjustments facilitated in the CFA zone as a whole?compared to other SSA countries?as well as in each of its ember countries.
Keywords: Equilibrium exchange rates; CFA zone; Optimum Currency Areas; currency union sustainability (search for similar items in EconPapers)
JEL-codes: C23 F31 F33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr, nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Journal Article: Revisiting the theory of optimum currency areas: Is the CFA franc zone sustainable? (2013)
Working Paper: Revisiting the theory of optimum currency areas: Is the CFA franc zone sustainable? (2013)
Working Paper: Revisiting the theory of optimum currency areas: Is the CFA franc zone sustainable? (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cii:cepidt:2012-13
Access Statistics for this paper
More papers in Working Papers from CEPII research center Contact information at EDIRC.
Bibliographic data for series maintained by ().