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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:The CFA Franc Zones and the Theory of Optimum Currency Area
Author:Gurtner, Francois J.
Periodical:Afrika Spectrum
Geographic terms:French-speaking Africa
Subsaharan Africa
Subjects:franc zone
Economics and Trade
Inter-African Relations
Politics and Government
international relations
Abstract:This article applies the theory of Optimum Currency Area (OCA) to the CFA franc zones - central and western Africa - in order to examine whether one of the two zones is more optimal than the other from a monetary point of view, in other words, whether the two zones should be differentiated from each other or considered as identical. The article first outlines the CFA arrangement and its participants, and the theoretical framework of the OCA. Then it analyses GDP growth and GDP deflator in the CFA countries for the period 1967-1996, the level of intraregional trade, and labour mobility in both zones. The conclusion is that neither of the two zones is close to fulfilling all the OCA criteria. In both zones, the degree of heterogeneity of production remains very high and the export base very narrow. In addition, it is difficult to distinguish the degree of labour mobility in both zones. Finally, intrazone trade is shown to be very low with no prospect for change in the near future. App., bibliogr., notes, ref., sum. in English, French and German.