CEPII, Recherche et Expertise sur l'economie mondiale
Revisiting the theory of optimum currency areas: Is the CFA franc zone sustainable?

Cécile Couharde
Issiaka Coulibaly
David Guerreiro
Valérie Mignon

 Points clés :

 Résumé :
This paper aims at explaining why the CFA countries have successfully maintained a currency union for several decades, despite failing to meet many of optimum currency area criteria. We suggest that the CFA zone, while not optimal, has been at least sustainable. We test this sustainability hypothesis by relying on the Behavioral Equilibrium Exchange Rate (BEER) approach. In particular, we assess and compare the convergence process of real exchange rates towards equilibrium for the CFA zone countries and a sample of other sub-Saharan African (SSA) countries. Our findings evidence that internal and external balances have been fostered and adjustments facilitated in the CFA zone as a whole?compared to other SSA countries?as well as in each of its ember countries.

 Mots-clés : taux de change d’équilibre | zone franc CFA | zone monétaire optimale | zone monétaire soutenable

 JEL : F31, F33, C23
CEPII Working Paper
N°2012-13, June 2012

Résumés non-techniques

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