The thesis takes as its point of departure the "long-run monetary union" between France and fifteen French-speaking African countries to provide insights into how the rules, mechanisms and practices underlying the monetary dependence of these African states operate. The main objective of the study is to contribute towards a better understanding of the institutions and principles governing the CFA franc zone with the intention of helping policy-makers to take optimal decisions.
A well-designed monetary policy could generate employment and pro-poor growth. But designing and administering a good policy will depend on the objective of policy designers. In principle, monetary authorities could choose between a fixed exchange regime and a flexible exchange regime. Of this, the above African countries adopted a managed regime with France since 1945. In this study, I examine the relationship between monetary autonomy and poverty reduction in the Franc Zone. The discussion focused on the impact of monetary independence on poverty incidence and poverty gap in the fifteen African nations.
I utilized two OLS model equations. The functions were estimated using data from a panel of 14 countries (the exception being Equatorial Guinea because insufficient data were available) in the CFA franc zone and covering the 1984-2011 period. Seven predictor variables were forced into the models. With regard to the findings, only four of them such as inflation and, more importantly, credit to private sector, centralization rate, exchange rate and gross national savings are important to headcount index and the depth of poverty reduction in the CFA franc zone.The results therefore suggest that monetary sovereignty measured by the specified variables is a driving force for poverty reduction in the CFA franc zone.
|Advisor:||Polley, William J.|
|Commitee:||Dehkordi-Vakil, Farideh H., Melkumian, Alice A.|
|School:||Western Illinois University|
|School Location:||United States -- Illinois|
|Source:||MAI 54/03M(E), Masters Abstracts International|
|Subjects:||African Studies, Economics, Finance, Economic theory, Public administration|
|Keywords:||CFA, Comorian franc, Fixed exchange rate regime, Monetary dependence, Monetary independence, Operations account, Poverty reduction|
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