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The CFA Arrangements :, More than Just An Aid Substitute?, Etienne Yehoue

The CFA franc zone has had one of the longest experiences with a fixed exchange rate for a convertible currency and regional integration of any group of developing countries. France, the anchor country, provides aid to support the zone. This paper asks whether the arrangements are more than just an aid substitute. The paper addresses this issue by evaluating the overall performance of the zone over the period 1960-2004. The analysis reveals that when the zone is hit by a negative shock, France increases its aid, thereby acting as a shock absorber. However, it also finds that the zone displays strong performance in two areas-price stability and fiscal policy. Thus the paper concludes that the arrangements are not an aid substitute; they have real macroeconomic value for the zone and complement aid
Table Of Contents
Contents; I. Introduction; II. An Overview of Economic Performance in the Franc Zone; A. Inflation; B. Intra-Franc Zone Trade; C. Fiscal Discipline; D. Pattern of Risk Sharing; III. Exchanges with France; A. Aid; B. Trade; IV. Summary and Discussions of the Results; V. Concluding Remarks; References; Appendix; Methodology for Estimating the Degree of Risk Sharing via Different Channels; Tables; 1a. CFA Franc Zone Countries' Mean Annual Inflation Rate, 1960-2004; 1b. Non-CFA Franc Zone Countries' Mean Annual Inflation Rate, 1960-2004
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (35 p.)
Specific Material Designation
Form Of Item

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