The EMU, the euro, the bipolar international monetary system and the Sub-saharan Africa economies : a primer / L'UME, l'euro, le système monétaire international bipolaire et les économies de l'Afrique sub-saharienne : amorce de littérature
(2005)
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- Authors
- Supervisors
- Delbecque, Bernard
- Abstract
- (en) Our dissertation tried to gain insight on the possible implications of the euro behavior and the EMU economic activity on the economies of typical Sub-Saharan African countries in a bipolar international monetary system. Chapter 1 has built a three country model in which an interdependent monetary policy game between two big economies, especially that of the United States and the EMU, has an impact on outcomes of a small country monetary policy. It was found that cooperation between big country monetary policymakers is beneficial for the small country whenever the shocks affecting big country economies imply changes in the euro-dollar exchange rate. Chapter 2 has dealt with the issue of the sustainability of pegging an African currency to the euro as EMU monetary authorities pursue a "low inflation" policy and asymmetric shocks affect the anchor and the pegging country. Our model indicated that the key factor of this longevity is the virtual convertibility granted by the French Treasury to the CFA franc. Moreover, it appears that structural asymmetries are likely to make the currency peg to the euro more restraining. In Chapter 3, the relationships between EMU and Sub-Saharan Africa's countries are empirically investigated. This chapter showed that despite the appealing theoretical relations suggested by trade flows, the EMU business cycle and the European product prices have a limited impact on African country economies. But in the monetary area, the European Central Bank monetary policy leads significantly that of African countries according to the available data. African inflation performances follow that of EMU after some lags. This result confirms the "operation account" mechanism effect which allows African countries to momentarily have a worse inflation performance without any devaluation. Chapter 4 empirically tackles the possible impact of euro-dollar exchange rate variations on Sub-Saharan Africa's country trade balances. After providing a theoretical model of a typical Sub-Saharan African country trade balance that suggests an inverted J-curve--like effect, it is found that only the trade balance of Benin among ten countries is affected by the movements of the euro-dollar exchange rate. The result also suggests that the inverted J-curve effect works at least partially for this country.
- Affiliations
Citations
Nyembwe Musungaïe, A. (2005). The EMU, the euro, the bipolar international monetary system and the Sub-saharan Africa economies : a primer / L’UME, l’euro, le système monétaire international bipolaire et les économies de l’Afrique sub-saharienne : amorce de littérature. https://hdl.handle.net/2078.5/60744