Trade Pattern Between CFA Franc Zone and Euro Countries Before and After the European Monetary Union
(2024) NEKH02 20241Department of Economics
- Abstract
- The CFA Franc Zone in Northern Africa is a currency union where the currency has been pegged to the French Franc since 1945. After the formation of the European Monetary Union in 1999, the peg is now against the larger currency Euro and no longer against one single currency, the French Franc. Has the new peg to the Euro had a positive effect on the CFA countries’ trade flow with the Eurozone compared to before EMU, when the peg was against the French Franc? The purpose of the thesis is to study how the trade pattern between the CFA Zone and the Eurozone has developed since the peg to the French Franc was changed to a peg to the Euro. I use the gravity model of trade for my estimates with a dummy for identifying the effect of the changed... (More)
- The CFA Franc Zone in Northern Africa is a currency union where the currency has been pegged to the French Franc since 1945. After the formation of the European Monetary Union in 1999, the peg is now against the larger currency Euro and no longer against one single currency, the French Franc. Has the new peg to the Euro had a positive effect on the CFA countries’ trade flow with the Eurozone compared to before EMU, when the peg was against the French Franc? The purpose of the thesis is to study how the trade pattern between the CFA Zone and the Eurozone has developed since the peg to the French Franc was changed to a peg to the Euro. I use the gravity model of trade for my estimates with a dummy for identifying the effect of the changed peg. My findings do not support my hypothesis. The stronger Euro peg has in fact lead to a decrease in the Sub-Saharan trade with the Eurozone, however, it has had a positive effect on trade between CFA countries and France. Evidence of increased trade flow between France and the Eurozone after the implementation of the Euro leads me to the assumption that France still relies on its strong post-colonial relationship with the CFA countries and acts as a middleman between the African countries and the Eurozone. (Less)
- Abstract (French)
- La zone du franc CFA en Afrique subsaharienne est une union monétaire où la monnaie était rattachée au franc français depuis 1945. Après la formation de l'Union Monétaire Européenne en 1999, l’ancrage est désormais à l'euro, une plus grande devise, et non plus uniquement au franc français. Le nouveau rattachement à l’euro, a-t-il eu un effet positif sur les flux commerciaux de pays de la zone CFA avec la zone euro, comparé à avant l’UEM, lorsque l’ancrage était au franc français ? L’objectif de cette thèse est d’étudier comment la structure des échanges commerciaux entre la zone CFA et la zone euro a évolué depuis que l’ancrage au franc français a été modifié pour un ancrage à l’euro. J’utilise l’équation de gravité du commerce pour mes... (More)
- La zone du franc CFA en Afrique subsaharienne est une union monétaire où la monnaie était rattachée au franc français depuis 1945. Après la formation de l'Union Monétaire Européenne en 1999, l’ancrage est désormais à l'euro, une plus grande devise, et non plus uniquement au franc français. Le nouveau rattachement à l’euro, a-t-il eu un effet positif sur les flux commerciaux de pays de la zone CFA avec la zone euro, comparé à avant l’UEM, lorsque l’ancrage était au franc français ? L’objectif de cette thèse est d’étudier comment la structure des échanges commerciaux entre la zone CFA et la zone euro a évolué depuis que l’ancrage au franc français a été modifié pour un ancrage à l’euro. J’utilise l’équation de gravité du commerce pour mes estimations, avec une variable factice pour identifier l’effet du changement d’ancrage. Mes résultats ne soutiennent pas mon hypothèse. Le renforcement de l’ancrage à l’euro a en fait entraîné une diminution des échanges commerciaux subsahariens avec la zone euro, mais il y a eu un effet positif sur les échanges entre les pays de la zone CFA et la France. Des preuves d’une augmentation des flux commerciaux entre la France et la zone euro après la mise en œuvre de l’euro, m’amènent à supposer que la France s’appuie toujours sur ses fortes relations post-coloniales avec les pays CFA et agit comme intermédiaire entre les pays africains et la zone euro. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9163889
- author
- Persson, Sebastian LU
- supervisor
- organization
- course
- NEKH02 20241
- year
- 2024
- type
- M2 - Bachelor Degree
- subject
- keywords
- Trade, CFA Franc Zone, Euro, Gravity Model, Currency Peg
- language
- English
- id
- 9163889
- date added to LUP
- 2024-09-24 09:00:02
- date last changed
- 2024-09-24 09:00:02
@misc{9163889,
abstract = {{The CFA Franc Zone in Northern Africa is a currency union where the currency has been pegged to the French Franc since 1945. After the formation of the European Monetary Union in 1999, the peg is now against the larger currency Euro and no longer against one single currency, the French Franc. Has the new peg to the Euro had a positive effect on the CFA countries’ trade flow with the Eurozone compared to before EMU, when the peg was against the French Franc? The purpose of the thesis is to study how the trade pattern between the CFA Zone and the Eurozone has developed since the peg to the French Franc was changed to a peg to the Euro. I use the gravity model of trade for my estimates with a dummy for identifying the effect of the changed peg. My findings do not support my hypothesis. The stronger Euro peg has in fact lead to a decrease in the Sub-Saharan trade with the Eurozone, however, it has had a positive effect on trade between CFA countries and France. Evidence of increased trade flow between France and the Eurozone after the implementation of the Euro leads me to the assumption that France still relies on its strong post-colonial relationship with the CFA countries and acts as a middleman between the African countries and the Eurozone.}},
author = {{Persson, Sebastian}},
language = {{eng}},
note = {{Student Paper}},
title = {{Trade Pattern Between CFA Franc Zone and Euro Countries Before and After the European Monetary Union}},
year = {{2024}},
}