International aid has an ambiguous effect on the macroeconomy of the recipient country. To the extent that aid raises consumer expenditure, there will be some real exchange rate appreciation and a shift of resources away from traded goods production and into non-traded goods production. However,...

There is a large literature on the impact of exchange rate and monetary policy regimes on inflation volatility in emerging markets. Other determinants of inflation volatility are less well understood. Using monthly time-series data on the prices of ninety-six individual products in thirty-seven...

The West African Economic and Monetary Union (UEMOA) has a history of monetary stability and low inflation. Nevertheless, there is substantial variation in relative prices within some UEMOA countries, in particular in the price of food relative to other elements of the retail price index (IHPC)....

The paper examines the factors determining aggregate public expenditure in Sub-Saharan Africa, using a modelling framework which draws on insights from the theory of the private consumer. Of particular interest is the extent to which countries of different kinds are limited in their ability to...

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...

This paper analyses the evolution of demand for bank deposits in Cote d'Ivoire over a period including the CFA Franc devaluation in 1994. Once we have allowed for smooth transitions in the deterministic component of the demand function, the estimated relationship between deposits and income and...

Using a game-theoretic model, this paper explores the positive and normative economics of government policy choices in a monetary union. If individual governments have control over fiscal policy, then the non-cooperative solution to the model is not Pareto optimal. Moreover, the distribution of...

An eclectic model of investment is constructed for Kenya and Cote d'Ivoire, using a two-step Engle-Granger approach to deal with non-stationary variables. Both monetary and financial integration are found to play a role in the determination of investment. Copyright 1993 by Oxford University Press.