There are reasons to believe that establishing a monetary union might either strengthen or weaken fiscal discipline in member states. The same could be said for the establishment of an exchange rate peg with full convertibility. I ask why neither of these two mechanisms has promoted fiscal...

This paper examines to what extent the central bank for the West African Economic and Monetary Union (BCEAO) has used interest rate policy in response to domestic economic developments. We show that while in the long run the BCEAO matches changes in French (Eurozone) interest rates one for one,...