On the Adequacy of Monetary Arrangements in Sub-Saharian Africa
AbstractWe examine the economic rationale for monetary union(s) in Sub-Saharan Africa through the use of cluster analysis on a sample of 17 countries. The variables used stem from the theory of optimum currency areas and from the fear-of-floating literature. It is found that the existing CFA franc zone cannot be viewed as an optimum currency area: CEMAC and UEMOA countries do not belong to the same clusters, and a 'core' of the UEMOA can be defined on economic grounds. The results support the inclusion of the Gambia, Ghana and Sierra Leone in an extended UEMOA arrangement, or the creation of a separate monetary union with the 'core' of the UEMOA and the Gambia, rather than the creation of a monetary union around Nigeria. Finally, the creation of the West African Monetary Zone (WAMZ) around Nigeria is not supported by the data. Copyright Blackwell Publishing Ltd 2005.
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Bibliographic InfoPaper provided by CEPII research center in its series Working Papers with number 2003-11.
Date of creation: Aug 2003
Date of revision:
Monetary block; Franc CFA zone; Optimum currency area;
Other versions of this item:
- Agnès Bénassy-Quéré & Maylis Coupet, 2005. "On the Adequacy of Monetary Arrangements in Sub-Saharan Africa," The World Economy, Wiley Blackwell, vol. 28(3), pages 349-373, 03.
- A. Bénassy-Quéré & Maylis Coupet, 2003. "On the Adequacy of Monetary Arrangements in Sub-Saharian Africa," THEMA Working Papers 2003-38, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
This paper has been announced in the following NEP Reports:
- NEP-DEV-2003-09-14 (Development)
- NEP-IFN-2003-09-14 (International Finance)
- NEP-MAC-2003-09-14 (Macroeconomics)
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