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

Ferdinand Owoundi

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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)
Date: 2015-07
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Citations: View citations in EconPapers (1)

Published in International Economics, 2015, International trade, FDI and growth: some interactions, 145, pp.92-110. ⟨10.1016/j.inteco.2015.10.001⟩

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Journal Article: Do exchange rate misalignments really affect economic growth? The case of Sub-Saharan African countries (2016)
Journal Article: Do exchange rate misalignments really affect economic growth? The case of Sub-Saharan African countries (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01403708

DOI: 10.1016/j.inteco.2015.10.001

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