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Economic growth and monetary union in sub-Saharan Africa: new evidence on the effects of CFA-zone membership

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  • Mamadou Wane
  • Paul Burkett
  • Robert Guell

Abstract

Estimation of a structural economic growth equation using data for 26 sub-Saharan African countries over the years 1974-92 reveals positive growth effects of membership in the French African Community (CFA) zone stemming from an enhanced productivity of investment. However, these effects appear to be limited to the pre-1980 period, despite the CFA's superior inflation performance relative to non-CFA countries thereafter. The results also support the importance of distinguishing between expected and unexpected inflation in analysing the growth effects of inflation and of CFA membership.

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  • Mamadou Wane & Paul Burkett & Robert Guell, 1996. "Economic growth and monetary union in sub-Saharan Africa: new evidence on the effects of CFA-zone membership," Applied Economics Letters, Taylor & Francis Journals, vol. 3(12), pages 769-773.
    • Handle: RePEc:taf:apeclt:v:3:y:1996:i:12:p:769-773
    DOI: 10.1080/135048596355565
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    References listed on IDEAS

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    1. Savvides, Andreas, 1995. "Economic growth in Africa," World Development, Elsevier, vol. 23(3), pages 449-458, March.
    2. Richard Burdekin & Thomas Goodwin & Suyono Salamun & Thomas Willett, 1994. "The effects of inflation on economic growth in industrial and developing countries: is there a difference?," Applied Economics Letters, Taylor & Francis Journals, vol. 1(10), pages 175-177.
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    4. Mr. James M. Boughton, 1991. "The CFA Franc Zone: Currency Union and Monetary Standard," IMF Working Papers 1991/133, International Monetary Fund.
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    8. Devarajan, Shantayanan & de Melo, Jaime, 1987. "Evaluating participation in African monetary unions: A statistical analysis of the CFA Zones," World Development, Elsevier, vol. 15(4), pages 483-496, April.
    9. Allechi, M'Bet & Niamkey, Madeleine A., 1994. "Evaluating the net gains from the CFA Franc Zone membership: A different perspective," World Development, Elsevier, vol. 22(8), pages 1147-1160, August.
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    Cited by:

    1. Moshi Optat Herman & Kirsten Wandschneider & Thierry Warin & Phanindra Wunnava, 2011. "Southern African Economic Integration: Evidence from an Augmented Gravity Model," The African Finance Journal, Africagrowth Institute, vol. 13(1), pages 1-13.
    2. Inoue, Takeshi & Hamori, Shigeyuki, 2013. "Financial Permeation and Economic Growth: Evidence from Sub-Saharan Africa," MPRA Paper 53417, University Library of Munich, Germany.
    3. Giorgioni, Gianluigi & Holden, Ken, 2002. "The crisis of the CFA Franc zone: the case of Cote d'Ivoire," Economic Modelling, Elsevier, vol. 19(4), pages 531-564, August.

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