Choix du régime de change et croissance économique: Une analyse empirique sur des données de panel africaines

Exchange Rate Regime Choice and Economic Growth: An Empirical Analysis on African Panel Data

Anass Abouelkhaira, Taha Gahaz and Yasser Y. Tamsamani

MPRA Paper from University Library of Munich, Germany

Abstract: The story of the choice of exchange rate regimes has not yet come to a consensus. Between early works on the subject (Mundell, 1961; McKinnon, 1963) and the most recent (Frenkel, 2017; Guzman et al., 2017), no superiority of a foreign exchange regime on the others is established ad vitam aeternam. It’s case by case. The purpose of this paper is then twofold. It first tests on panel data concerning 30 African countries the thesis of currency neutrality and attempts to rank, in case of rejection of this thesis, exchange rate regimes according to their economic performances by referring to economic growth rate. Next, it aims to list the internal structural characteristics of the panel countries which, by crossing them with exchange rate regimes, are the most favorable to economic growth. The paper concludes the absence of currency neutrality in case of African countries and an outperformance of intermediate regimes. The latter are more conductive to economic growth in the case of countries experiencing positive terms of trade shocks and benefiting from FDI inflows. On the other hand, the opening of capital account is incompatible with intermediate regimes, and external indebtedness doesn’t favor economic growth regardless of the exchange rate regime adopted. These results remain robust by testing several alternative econometric specifications (long-term estimate on five years’ window data, estimates by controlling regional effects and by adopting finer aggregations of exchange rate regimes).

Keywords: Exchange Rate Regime; Economic Growth; FDI; External Debt; Opening of Capital Account; Terms of Trade; Panel Data; Africa (search for similar items in EconPapers)
JEL-codes: C23 C26 F31 F43 F63 O55 (search for similar items in EconPapers)
Date: 2018-02-16
New Economics Papers: this item is included in nep-int
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