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Journal Articles Review of Development Economics Year : 2013

West African Single Currency and Competitiveness

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Abstract

This paper compares different nominal anchors to promote internal and external competitiveness in the case of a fixed exchange rate regime for the future single regional currency of the Economic Community of the West African States (ECOWAS). We use counterfactual analyses and estimate a model of dependent economy for small commodity exporting countries. We consider four foreign anchor currencies: the US dollar, the euro, the yen and the yuan. Our simulations show little support for a dominant peg in the ECOWAS area if they pursue several goals: maximizing the export revenues, minimizing their variability, stabilizing them and minimizing the real exchange rate misalignments from the fundamental value.

Dates and versions

hal-01500863 , version 1 (03-04-2017)

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Gilles Dufrénot, Kimiko Sugimoto. West African Single Currency and Competitiveness. Review of Development Economics, 2013, 17 (4), pp.763-777. ⟨10.1111/rode.12064⟩. ⟨hal-01500863⟩
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