Currency devaluation and international competitiveness : the case of the CFA zone of West and Central Africa / Dosse Toulaboe

Toulaboe, Dosse (2002) Currency devaluation and international competitiveness : the case of the CFA zone of West and Central Africa / Dosse Toulaboe. Journal of International Business and Entrepreneurship, 9 (1). pp. 1-17. ISSN 0128-7494

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Abstract

The lack of external competitiveness in the CFA zone resulting from an appreciation of the CFA franc and deterioration of the terms of trade, is believed to be one of the major causes of the poor performance of the zone in the 1980s and early 1990s. The objective of this study is to investigate the effects of a nominal CFA devaluation on the external competitiveness of the CFA zone. Based on pooled cross-section timeseries data regressions, the real effective exchange rate (a measure of external competitiveness) is found to be strongly related to productivity, terms of trade, trade policies and, most importantly, nominal CFA devaluation. The results indicate that a nominal devaluation of the CFA franc can help the zone regain (or maintain) its international competitiveness.

Item Type: Article
Uncontrolled Keywords: CFA, Competitiveness, Devaluation, Africa
Subjects: H Social Sciences > HF Commerce > International economic relations > Competition. International competition
H Social Sciences > HG Finance > Foreign exchange. International finance. International monetary system
Divisions: Malaysian Entrepreneurship Development Centre (MEDEC)
Depositing User: Staf Pendigitan 1
Date Deposited: 10 Mar 2015 06:16
Last Modified: 29 Nov 2016 08:54
URI: http://ir.uitm.edu.my/id/eprint/11429

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