Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123623
Authors: 
Asongu, Simplice A.
Year of Publication: 
2014
Series/Report no.: 
AGDI Working Paper WP/14/019
Abstract: 
We assess the behavior of real effective exchange rates (REERs) of members of the CEMAC zone with respect to their long-term equilibrium paths. A reduced form of the fundamental equilibrium exchange rate (FEER) model is estimated and associated misalignments are derived for the period 1980 to 2009. Our findings suggest that for majority of countries, macroeconomic fundamentals have the expected associations with the exchange rate fluctuations. The analysis also reveals that, only the REER adjustments of Cameroon and Gabon are significant in restoring the long-term equilibrium in event of a shock. The Cameroonian economic fundamentals of terms of trade, government expenditure and openness have different long-term relations with the REER in comparison to those of other member states. Ultimately, there is no need for an adjustment in the level of the peg based on the present quantitative analysis of REER paths.
Subjects: 
Exchange rate
Macroeconomic impact
CEMAC zone
JEL: 
F31
F33
F42
F61
O55
Document Type: 
Working Paper

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