Cote d’Ivoire : Competitiveness, Cocoa, and the Real Exchange Rate
This paper explores competitiveness of Cote d'Ivoire's economy over a long period of 1960-2003 and its link with cocoa prices. The main conclusions are as follows. First, using four measures of real effective exchange rate (REER) for the...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2007/11/8789763/cote-divoire-competitiveness-cocoa-real-exchange-rate-cote-divoire-competitiveness-cocoa-real-exchange-rate http://hdl.handle.net/10986/7629 |
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okr-10986-76292021-04-23T14:02:34Z Cote d’Ivoire : Competitiveness, Cocoa, and the Real Exchange Rate Bogetic, Zeljko Espina, Carlos Noer, John AGRICULTURE ANNUAL GROWTH BALANCE OF PAYMENT BASE YEAR BILL BUSINESS CYCLES CAPITAL MOBILITY COCOA PRICE COCOA PRICES COMMODITIES COMMODITY COMMODITY EXPORTS COMMODITY PRICE COMMODITY PRICES COMPETITIVE EQUILIBRIUM COMPETITIVENESS CONSUMER GOODS CONSUMER PRICE CONSUMER PRICE INDEX CONSUMER PRICE INDICES CURRENCY CUSTOMER BASE DEFLATORS DEPENDENT VARIABLE DESCRIPTIVE STATISTICS DEVALUATION DEVELOPING COUNTRIES DIRECTION OF TRADE DISTRIBUTION OF TRADE DOMESTIC PRICES DUMMY VARIABLE DUTCH DISEASE ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC STATISTICS EMERGING ECONOMIES ERROR TERM EXCESS DEMAND EXPORT GOOD EXPORTER EXPORTS EXPOSURE EXTERNAL SHOCK EXTERNAL SHOCKS FIXED EXCHANGE RATE FIXED EXCHANGE RATE REGIME FOREIGN CURRENCY FOREIGN EXCHANGE FOREIGN EXCHANGE EARNINGS FUNDAMENTAL DETERMINANT FUTURES GDP GDP DEFLATOR GROSS DOMESTIC PRODUCT GROWTH RATES IMPORT IMPORTS INEFFICIENCY INFLATION INSTRUMENTAL VARIABLES INTEREST RATE DIFFERENTIALS INTERNATIONAL COMPETITIVENESS INTERNATIONAL PRICE INTERNATIONAL PRICES INTERNATIONAL TRADE LABOR FORCE LABOR FORCE GROWTH LOCAL CURRENCY LONG-RUN EQUILIBRIUM MACROECONOMIC VARIABLE MARKET SHARE NATURAL RESOURCE NOMINAL WAGE OPEN ECONOMIES OUTPUT PEG POLICY RESEARCH POVERTY REDUCTION PRICE DECLINES PRICE QUOTATIONS PRICE RIGIDITIES PURCHASING PURCHASING POWER PURCHASING POWER PARITY REAL ADJUSTMENTS REAL APPRECIATION REAL DEPRECIATION REAL DISTURBANCES REAL EFFECTIVE EXCHANGE RATE REAL EXCHANGE REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST REAL INTEREST RATE REAL OUTPUT RELATIVE PRICE SERIAL CORRELATION SHARE OF WORLD OUTPUT SLOW GROWTH SPOT PRICE STRUCTURAL CHANGE STRUCTURAL REFORMS SUPPLIERS TOTAL EXPORTS TOTAL IMPORTS TRADABLE GOODS TRADE COMPETITIVENESS TRADE PATTERNS TRADE RESTRICTIONS TRADE STATISTICS TRADES TRADING PARTNER TRADING PARTNERS VALUE ADDED VOLATILITY WAGES WEIGHTS WHOLESALE PRICE WHOLESALE PRICE INDICES WORLD MARKET WORLD MARKETS WORLD PRICE WORLD PRICES WORLD TRADE This paper explores competitiveness of Cote d'Ivoire's economy over a long period of 1960-2003 and its link with cocoa prices. The main conclusions are as follows. First, using four measures of real effective exchange rate (REER) for the 1960-2002 period, we track the evolution of REER and conclude, inter alia, that until 2003, REER remained well below its 1994 level. Second, we find that based on our measure of the multilateral REER with dynamic weights, which covers most recorded trade, France no longer dominates Cote d'Ivoire's trade. Instead, Cote d'Ivoire has diversified its set of trading partners. Unfortunately, it has also specialized in one export product, raw cocoa. This paper aims to contribute to the question to what extent do cocoa prices affect Cote d'Ivoire's competitiveness in world trade? Third, the answer to this question is that cocoa prices are an important determinant of Cote d'Ivoire's competitiveness. Similar to the case of a classic "Dutch Disease," increases in the real world price of a "natural resource" (i.e., cocoa) tend to result in the appreciation of the CFA franc and a loss in competitiveness. Econometric tests further confirm that 1994 was a "break-point" not only for growth and productivity (as documented in the two related papers) but also for trade competitiveness. Recent productivity per worker trends versus wages also seem to indicate slow growth in 1996-2000, without major improvement in competitiveness. 2012-06-11T14:26:07Z 2012-06-11T14:26:07Z 2007-11 http://documents.worldbank.org/curated/en/2007/11/8789763/cote-divoire-competitiveness-cocoa-real-exchange-rate-cote-divoire-competitiveness-cocoa-real-exchange-rate http://hdl.handle.net/10986/7629 English Policy Research Working Paper; No. 4416 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Africa Cote d'Ivoire |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
AGRICULTURE ANNUAL GROWTH BALANCE OF PAYMENT BASE YEAR BILL BUSINESS CYCLES CAPITAL MOBILITY COCOA PRICE COCOA PRICES COMMODITIES COMMODITY COMMODITY EXPORTS COMMODITY PRICE COMMODITY PRICES COMPETITIVE EQUILIBRIUM COMPETITIVENESS CONSUMER GOODS CONSUMER PRICE CONSUMER PRICE INDEX CONSUMER PRICE INDICES CURRENCY CUSTOMER BASE DEFLATORS DEPENDENT VARIABLE DESCRIPTIVE STATISTICS DEVALUATION DEVELOPING COUNTRIES DIRECTION OF TRADE DISTRIBUTION OF TRADE DOMESTIC PRICES DUMMY VARIABLE DUTCH DISEASE ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC STATISTICS EMERGING ECONOMIES ERROR TERM EXCESS DEMAND EXPORT GOOD EXPORTER EXPORTS EXPOSURE EXTERNAL SHOCK EXTERNAL SHOCKS FIXED EXCHANGE RATE FIXED EXCHANGE RATE REGIME FOREIGN CURRENCY FOREIGN EXCHANGE FOREIGN EXCHANGE EARNINGS FUNDAMENTAL DETERMINANT FUTURES GDP GDP DEFLATOR GROSS DOMESTIC PRODUCT GROWTH RATES IMPORT IMPORTS INEFFICIENCY INFLATION INSTRUMENTAL VARIABLES INTEREST RATE DIFFERENTIALS INTERNATIONAL COMPETITIVENESS INTERNATIONAL PRICE INTERNATIONAL PRICES INTERNATIONAL TRADE LABOR FORCE LABOR FORCE GROWTH LOCAL CURRENCY LONG-RUN EQUILIBRIUM MACROECONOMIC VARIABLE MARKET SHARE NATURAL RESOURCE NOMINAL WAGE OPEN ECONOMIES OUTPUT PEG POLICY RESEARCH POVERTY REDUCTION PRICE DECLINES PRICE QUOTATIONS PRICE RIGIDITIES PURCHASING PURCHASING POWER PURCHASING POWER PARITY REAL ADJUSTMENTS REAL APPRECIATION REAL DEPRECIATION REAL DISTURBANCES REAL EFFECTIVE EXCHANGE RATE REAL EXCHANGE REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST REAL INTEREST RATE REAL OUTPUT RELATIVE PRICE SERIAL CORRELATION SHARE OF WORLD OUTPUT SLOW GROWTH SPOT PRICE STRUCTURAL CHANGE STRUCTURAL REFORMS SUPPLIERS TOTAL EXPORTS TOTAL IMPORTS TRADABLE GOODS TRADE COMPETITIVENESS TRADE PATTERNS TRADE RESTRICTIONS TRADE STATISTICS TRADES TRADING PARTNER TRADING PARTNERS VALUE ADDED VOLATILITY WAGES WEIGHTS WHOLESALE PRICE WHOLESALE PRICE INDICES WORLD MARKET WORLD MARKETS WORLD PRICE WORLD PRICES WORLD TRADE |
| spellingShingle |
AGRICULTURE ANNUAL GROWTH BALANCE OF PAYMENT BASE YEAR BILL BUSINESS CYCLES CAPITAL MOBILITY COCOA PRICE COCOA PRICES COMMODITIES COMMODITY COMMODITY EXPORTS COMMODITY PRICE COMMODITY PRICES COMPETITIVE EQUILIBRIUM COMPETITIVENESS CONSUMER GOODS CONSUMER PRICE CONSUMER PRICE INDEX CONSUMER PRICE INDICES CURRENCY CUSTOMER BASE DEFLATORS DEPENDENT VARIABLE DESCRIPTIVE STATISTICS DEVALUATION DEVELOPING COUNTRIES DIRECTION OF TRADE DISTRIBUTION OF TRADE DOMESTIC PRICES DUMMY VARIABLE DUTCH DISEASE ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC STATISTICS EMERGING ECONOMIES ERROR TERM EXCESS DEMAND EXPORT GOOD EXPORTER EXPORTS EXPOSURE EXTERNAL SHOCK EXTERNAL SHOCKS FIXED EXCHANGE RATE FIXED EXCHANGE RATE REGIME FOREIGN CURRENCY FOREIGN EXCHANGE FOREIGN EXCHANGE EARNINGS FUNDAMENTAL DETERMINANT FUTURES GDP GDP DEFLATOR GROSS DOMESTIC PRODUCT GROWTH RATES IMPORT IMPORTS INEFFICIENCY INFLATION INSTRUMENTAL VARIABLES INTEREST RATE DIFFERENTIALS INTERNATIONAL COMPETITIVENESS INTERNATIONAL PRICE INTERNATIONAL PRICES INTERNATIONAL TRADE LABOR FORCE LABOR FORCE GROWTH LOCAL CURRENCY LONG-RUN EQUILIBRIUM MACROECONOMIC VARIABLE MARKET SHARE NATURAL RESOURCE NOMINAL WAGE OPEN ECONOMIES OUTPUT PEG POLICY RESEARCH POVERTY REDUCTION PRICE DECLINES PRICE QUOTATIONS PRICE RIGIDITIES PURCHASING PURCHASING POWER PURCHASING POWER PARITY REAL ADJUSTMENTS REAL APPRECIATION REAL DEPRECIATION REAL DISTURBANCES REAL EFFECTIVE EXCHANGE RATE REAL EXCHANGE REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST REAL INTEREST RATE REAL OUTPUT RELATIVE PRICE SERIAL CORRELATION SHARE OF WORLD OUTPUT SLOW GROWTH SPOT PRICE STRUCTURAL CHANGE STRUCTURAL REFORMS SUPPLIERS TOTAL EXPORTS TOTAL IMPORTS TRADABLE GOODS TRADE COMPETITIVENESS TRADE PATTERNS TRADE RESTRICTIONS TRADE STATISTICS TRADES TRADING PARTNER TRADING PARTNERS VALUE ADDED VOLATILITY WAGES WEIGHTS WHOLESALE PRICE WHOLESALE PRICE INDICES WORLD MARKET WORLD MARKETS WORLD PRICE WORLD PRICES WORLD TRADE Bogetic, Zeljko Espina, Carlos Noer, John Cote d’Ivoire : Competitiveness, Cocoa, and the Real Exchange Rate |
| geographic_facet |
Africa Cote d'Ivoire |
| relation |
Policy Research Working Paper; No. 4416 |
| description |
This paper explores competitiveness of
Cote d'Ivoire's economy over a long period of
1960-2003 and its link with cocoa prices. The main
conclusions are as follows. First, using four measures of
real effective exchange rate (REER) for the 1960-2002
period, we track the evolution of REER and conclude, inter
alia, that until 2003, REER remained well below its 1994
level. Second, we find that based on our measure of the
multilateral REER with dynamic weights, which covers most
recorded trade, France no longer dominates Cote
d'Ivoire's trade. Instead, Cote d'Ivoire has
diversified its set of trading partners. Unfortunately, it
has also specialized in one export product, raw cocoa. This
paper aims to contribute to the question to what extent do
cocoa prices affect Cote d'Ivoire's
competitiveness in world trade? Third, the answer to this
question is that cocoa prices are an important determinant
of Cote d'Ivoire's competitiveness. Similar to the
case of a classic "Dutch Disease," increases in
the real world price of a "natural resource"
(i.e., cocoa) tend to result in the appreciation of the CFA
franc and a loss in competitiveness. Econometric tests
further confirm that 1994 was a "break-point" not
only for growth and productivity (as documented in the two
related papers) but also for trade competitiveness. Recent
productivity per worker trends versus wages also seem to
indicate slow growth in 1996-2000, without major improvement
in competitiveness. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Bogetic, Zeljko Espina, Carlos Noer, John |
| author_facet |
Bogetic, Zeljko Espina, Carlos Noer, John |
| author_sort |
Bogetic, Zeljko |
| title |
Cote d’Ivoire : Competitiveness, Cocoa, and
the Real Exchange Rate |
| title_short |
Cote d’Ivoire : Competitiveness, Cocoa, and
the Real Exchange Rate |
| title_full |
Cote d’Ivoire : Competitiveness, Cocoa, and
the Real Exchange Rate |
| title_fullStr |
Cote d’Ivoire : Competitiveness, Cocoa, and
the Real Exchange Rate |
| title_full_unstemmed |
Cote d’Ivoire : Competitiveness, Cocoa, and
the Real Exchange Rate |
| title_sort |
cote d’ivoire : competitiveness, cocoa, and
the real exchange rate |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2007/11/8789763/cote-divoire-competitiveness-cocoa-real-exchange-rate-cote-divoire-competitiveness-cocoa-real-exchange-rate http://hdl.handle.net/10986/7629 |
| _version_ |
1764402596925145088 |