New Monetary Unions in Africa: a Major Change in the Monetary Landscape?
AbstractAfrica has important initiatives to build regional currency areas and ultimately a single African currency. Calculations using a calibrated model show that the proposed monetary unions are unlikely to yield net economic benefits for all countries, suggesting that all-inclusive monetary unions are not incentive-compatible—even if trade doubles as a result of sharing a currency. Central banks are assumed not to be immune from pressures to finance governments. While a monetary union will to some extent dilute the influence of individual governments, countries that exhibit fiscal discipline would not want to join a monetary union with others that do not. Given the heterogeneity across countries, monetary unions could be selectively expanded but not encompass all countries in a region.
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Bibliographic InfoArticle provided by CEPII research center in its journal Economie Internationale.
Volume (Year): (2006)
Issue (Month): 107 ()
Currency unions; african trade; fiscal discipline; monetary block; models;
Find related papers by JEL classification:
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
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- Coulibaly, Issiaka & Gnimassoun, Blaise, 2013.
"Optimality of a monetary union: New evidence from exchange rate misalignments in West Africa,"
Elsevier, vol. 32(C), pages 463-482.
- Issiaka Coulibaly & Blaise Gnimassoun, 2012. "Optimality of a monetary union : New evidence from exchange rate misalignments in West Africa," EconomiX Working Papers 2012-37, University of Paris West - Nanterre la Défense, EconomiX.
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