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Review of World Economics

, Volume 141, Issue 3, pp 422–441 | Cite as

Do Currency Barriers Solve the Border Effect Puzzle? Evidence from the CFA Franc Zone

  • José de Sousa
  • Julie Lochard
Article

Abstract

In this paper, we use a gravity model to investigate the extent to which currency barriers explain the border effect puzzle, i.e. the impact of national borders on international trade. We focus on the two monetary unions of the CFA Franc Zone in West and Central Africa. We find that these countries display large border effects, and that currency barriers explain between 17 per cent and 28 per cent of the overall border effect.

Keywords

Borders gravity currency unions 

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Copyright information

© Kiel Institute for World Economics 2005

Authors and Affiliations

  1. 1.ROSESUniversity of Paris 1France

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