The authors evaluate whether, in the short run, a devaluation could be contractionary in developing countries that export primary commodities. To do so, they use a model capturing the principal features of those economies. The two most important channels for transmitting the change in parity are...

The author analyzes the fiscal policy of primary commodity exporters. After the initial boom in fiscal spending that accompanies a commodity boom, he asks, why do commodity-exporting countries tend to maintain higher spending levels despite a drop in commodity prices. He identifies three factors...

Despite belonging to a monetary union with a common currency and pooled foreign reserves, the countries of Africa's franc zone (CFA) experience substantially different inflation rates, especially in the short run. The authors develop a model of inflation differentials for the franc zone...