Journal article

The characteristics of macroeconomic shocks in the CFA Franc Zone

D Fielding, K Lee, K Shields

JOURNAL OF AFRICAN ECONOMIES | OXFORD UNIV PRESS | Published : 2004

Abstract

In this paper we fit a vector error correction model (VECM) in output and prices to data from 10 countries of the CFA Franc Zone. This model allows for various cross-country interactions in both the short run and the long run. The VECM parameters are used to estimate persistence profiles of different kinds, in order to identify the degree of homogeneity in the way in which the countries respond to macroeconomic shocks. In this way we can shed light on questions about the likely size of the costs incurred from these countries' membership of a monetary union. © Centre for the Study of African Economies 2004; all rights reserved.

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