International risk-sharing and currency unions: The CFA zones
Article first published online: 28 SEP 2010
Copyright © 2010 John Wiley & Sons, Ltd.
Journal of International Development
Volume 23, Issue 7, pages 936–958, October 2011
How to Cite
Yehoue, E. B. (2011), International risk-sharing and currency unions: The CFA zones. J. Int. Dev., 23: 936–958. doi: 10.1002/jid.1735
- Issue published online: 25 SEP 2011
- Article first published online: 28 SEP 2010
- currency unions;
- capital market;
- consumption smoothing;
- international risk-sharing;
- JEL Classification:;
This paper explores income and consumption smoothing patterns among the member countries of each of the CFA zones—the CEMAC1 and the WAEMU2—during the period 1980–2005. I find that for the CEMAC, about 24 per cent of shocks to GDP are smoothed through the standard channels (i.e. capital market, credit market and remittances). On the other hand, I find that 66 per cent of shocks are smoothed via foreign aid from France, and 6 per cent via central bank contributions, while reserves pooling provides no shock smoothing. For the WAEMU, I find that only 22 per cent of shocks are smoothed through the standard channels, while about 50 per cent are smoothed via foreign aid from France, 5 per cent via central bank contributions, and no smoothing via reserves pooling. Copyright © 2010 John Wiley & Sons, Ltd.