Reformers demand flexible exchange rates and growth-oriented central bank policy

Evidence

According to the critics of the CFA franc, the following changes are essential: moving towards a more flexible exchange rate regime for the countries of the franc zone; getting the central banks of the zone to take into account growth and development in addition to price stability, and to coherently coordinate their monetary policy with national budgetary policies; reforming the local financial and banking systems to facilitate the financing of the economies; and strengthening the fiscal solidarity between states. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 323 (#corroborates, via linked claim)

Money creation is often blamed for generating inflation, especially in developing countries. In principle, the risk of inflation does not exist so long as credit is allocated to productive investments that aim to increase the local productive capacity and reduce the under-utilisation of the workforce. Empirical studies have shown that episodes of high credit growth have rarely led to high inflation; or rather, that inflationary episodes have rarely been preceded by an increase in the money supply. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 145 (#expands, via linked claim)

Categorization

• XREF: connects to: CFA critics demand flexible exchange rates, development-oriented central banks, and banking reform — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 323; Currency independence alone cannot succeed without a self-centred development model; High credit growth rarely causes inflation when directed to productive investment — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 145 (+7 more)

Related

• CFA critics demand flexible exchange rates, development-oriented central banks, and banking reform (similarity 0.92)
• Currency independence alone cannot succeed without a self-centred development model (similarity 0.91)
• High credit growth rarely causes inflation when directed to productive investment (similarity 0.83)
• Fixed exchange rates trade employment stability for external balance (similarity 0.82)
• Fixed exchange rates force austerity when competitiveness declines (similarity 0.82)
• Franc-zone central banks must restrict domestic credit to defend the fixed euro parity (similarity 0.81)
• The CFA franc’s parity was set without regard for local economic realities (similarity 0.81)
• Self-interest blinded the French to unequal benefits of development (similarity 0.81)
• CFA ‘stability’ masks currency fluctuation against dollar and pound (similarity 0.81)
• The CFA franc was a political choice that deprived non-adapting African actors of credit (similarity 0.80)
• The CFA central banks subordinate domestic credit to defending the euro parity. (similarity 0.80)
• CFA franc parity changed only once since 1948 (similarity 0.80)
• The colonial vertical-integration trade model persists despite reoriented trading partners (similarity 0.80)
• The CFA franc structurally denied credit to economic actors outside colonial accumulation (similarity 0.80)
• ECOWAS convergence criteria are unrealistic for volatile African economies (similarity 0.79)

Broader Connections

• CFA critics demand flexible exchange rates, development-oriented central banks, and banking reform #corroborates (0.85) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 323
• Currency independence alone cannot succeed without a self-centred development model #qualifies (0.55)
• High credit growth rarely causes inflation when directed to productive investment #expands (0.50) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 145