FOREIGN AID INFLOWS AND THE REAL EXCHANGE RATE IN THE CFA FRANC ZONE

Bazoumana Ouattara and Eric Strobl ()

Economie Internationale, 2008, issue 116, 37-52

Abstract: This paper presents an empirical analysis of the relationship between foreign aid inflows and the real exchange rate in the countries of the CFA Franc zone. Using panel data analysis we find that foreign aid inflows are associated with the appreciation of the real exchange rate in the CFA countries between 1980 and 2000. However, our results also suggest that the potential "Dutch Disease" effects associated with these inflows could be offset if appropriate policies are implemented.

Keywords: Aid; Panel Data; Real Exchange Rates (search for similar items in EconPapers)
JEL-codes: C23 E31 F35 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (30)

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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepiei:2008-4tb

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