ABSTRACT
Fluctuations in climatic conditions and in international prices are important determinants of the well-being and behavior of participants in Senegal's economy. Climatic uncertainty is perhaps the most apparent feature of this economy. Indeed, it is the country's misfortune to provide the prototype for a poor economy reliant on a rainfed agriculture that is subject to significant climatic variation. In addition, Senegal is a small country that obtains many goods through international trade. It consequently faces additional uncertainty about the terms on which it can exchange its exports for foreign goods. Furthermore, Senegal receives transfers from various foreign sources, and these fluctuate from year to year (see also chapter 9 by John Lewis).
