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Article Dans Une Revue Review of International Economics Année : 2017

Exchange rate misalignments and the external balance under a pegged currency system

Blaise Gnimassoun

Résumé

This paper analyzes the link between the exchange rate misalignments and the external balance under a pegged currency system focusing on the former French colonies of Africa (the CFA zone). Having discussed and chosen an appropriate analytical framework, it addresses the issue of model uncertainty regarding the equilibrium exchange rate model before estimating currency misalignments. The results show that misalignments have a negative and asymmetric impact on the current account. While overvaluation of the CFA franc deteriorates the current account, undervaluation does not improve it. Finally, our results highlight that the export concentration tends to exacerbate the overall negative impact of currency misalignments.

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Dates et versions

hal-01665005 , version 1 (15-12-2017)

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  • HAL Id : hal-01665005 , version 1

Citer

Blaise Gnimassoun. Exchange rate misalignments and the external balance under a pegged currency system. Review of International Economics, 2017, 25, pp.949-974. ⟨hal-01665005⟩
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