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UNU-WIDER The Characteristics of Macroeconomic Shocks in the CFA Franc Zone

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The Characteristics of Macroeconomic Shocks in the CFA Franc Zone

In this paper we fit a VECM in output and prices to data from ten countries of the CFA Franc Zone. This model allows for various cross-country interactions in both the short run and the long run. The VECM parameters are used to estimate persistence profiles of different kinds, in order to identify the degree of homogeneity in the way in which the countries respond to macroeconomic shocks. In this way we can shed light on questions about the likely size of the costs incurred from these countries’ membership of a monetary union.
Publisher:
UNU-WIDER
Series:
WIDER Research Paper
Volume:
2004/21
Title:
The Characteristics of Macroeconomic Shocks in the CFA Franc Zone
Authors:
David Fielding, Kevin Lee and Kalvinder Shields
Publication date:
2004
ISSN Web:
1810-2611
ISBN Web:
929190600X
ISBN 13 Web:
9789291906000
Copyright holder:
© UNU-WIDER
Copyright year:
2004
Keywords:
CFA, VECM, monetary union, Africa
JEL:
C53, F42, O11
Project:
Long-term Development in the CFA-zone Countries of Sub-Saharan Africa
Sponsor:
UNU-WIDER acknowledges the financial contributions to the research programme by the governments of Denmark (Royal Ministry of Foreign Affairs), Finland (Ministry for Foreign Affairs), Norway (Royal Ministry of Foreign Affairs), Sweden (Swedish International Development Cooperation Agency-Sida) and the United Kingdom (Department for International Development).
Format:
online

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