Do exchange rate misalignments really affect economic growth? The case of Sub-Saharan African countries

Ferdinand Owoundi (1, 2)

1 CRIEF [Poitiers] - Centre de recherche sur l'intégration économique et financière
2 Axe 2 (2011-2016) : « Marchés, Cultures de consommation, Autonomie et Migrations » (MSHS Poitiers)

In order to shed light on the debate concerning the exiting of the Franc Zone area, we address the issue of the growth effects of currency misalignments in Sub-Saharan African countries. To this end, we first assess misalignments which we include in a growth equation while taking into account uncertainty and “jointness” between growth determinants using recent Bayesian inference techniques. More specifically, exchange rate regimes, as well as cross-sectional error dependence, will be explored. We thus demonstrate that the gain related to undervaluation is almost zero regardless of the exchange rate regime.

Mots clés: Misalignments; Growth; Bayesian inference; Cross-sectional dependence

Domaines: Economies et finances; Gestion et management

Ferdinand Owoundi. Do exchange rate misalignments really affect economic growth? The case of Sub-Saharan African countries. International Economics, 2015, International trade, FDI and growth: some interactions, 145, pp.92-110. ⟨10.1016/j.inteco.2015.10.001⟩. ⟨halshs-01403708⟩