Skip Navigation

This Article
Right arrow Full Text (PDF)
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrow Search for citing articles in:
ISI Web of Science (17)
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Devarajan, S.
Right arrow Search for Related Content
Related Collections
Right arrow F31 - Foreign Exchange
Right arrow O19 - International Linkages to Development; Role of International Organizations
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

Journal of African Economies, Volume 6, Number 1, 35-53
© 1997 Centre for the Study of African Economies

research-article

Real Exchange Rate Misalignment in the CFA Zone1

Shantayanan Devarajan

World Bank

Using a method of calculating real exchange rate (RER) misalignment which explicitly incorporates terms of trade shocks and the distinction between tradable and nontradable goods, this paper estimates RER overvaluation in 12 countries of the CFA franc zone before and after the 1994 devaluation of the CFA franc. The results show that prior to the devaluation, the RER was about 30% overvalued on average with sharp differences across the 12 countries. The larger oil producers (Cameroon and Gabon) were the most overvalued, while some of the smaller, landlocked countries (Chad and Burkina Faso) were much less so. The estimates appear to be robust to the choice of base year and the two elasticities of the model. One year after the devaluation, the RER was undervalued in a majority of countries, although the variation across countries remains, with Cameroon and Gabon still substantially overvalued.

1The findings, interpretations and conclusions expressed in this paper are entirely those of the author. They do not necessarily represent the views of the World Bank, its Executive Directors, or the countries they represent. I am grateful to Larry Hinkle and Peter Montiel for comments on an earlier draft. An earlier version of this paper was presented at the annual congress of the Association Francaise de Science Economique, Paris, September 1996.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?


This article has been cited by other articles:


Home page
 J Afr EconHome page
S. Coleman
Estimating Equilibrium Real Exchange Rates in the Franc Zone
J. Afr. Econ., August 1, 2008; 17(4): 600 - 634.
[Abstract] [Full Text] [PDF]


Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.