REAL EXCHANGE RATES AND COMPETITIVENESS IN THE CEMAC ZONE: AN ANALYSIS USING THE FGLS AND PCSE METHODS

The aim of this study is to examine the relationship between the real exchange rate and the economic competitiveness of the CEMAC zone countries using the Feasible Generalized Least Squares (FGLS) and Panel Corrected Standard Errors (PCSE) method. Our study covers the period from 1987 to 2018. The results obtained show that the real exchange rate positively and significantly affects the competitiveness of the CEMAC zone. Similarly, trade openness and corruption also positively and significantly impact competitiveness in the CEMAC zone. Thus, countries with more competitive real exchange rates tend to have better economic performance. In terms of recommendations, each country should develop a competitiveness index adapted to its economy that takes into account economic vulnerability factors (climate shocks and socio-political violence) as well as those of economic attractiveness (labor market, infrastructure, human capital, financial capital, political governance and economic governance).