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

Issiaka Coulibaly and Blaise Gnimassoun ()
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Blaise Gnimassoun: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique

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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: 2013
Note: View the original document on HAL open archive server: https://hal.science/hal-04141160
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Citations: View citations in EconPapers (1)

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