The viability of an economic and monetary union in Africa with a unified currency: evidence from the African economies' reactions to the international income, price and monetary shocks
AbstractThe purpose of this paper is to provide a framework to analyze the feasibility of an economic and monetary union in Africa with a common currency. In this context, the present study has two objectives. The first one is to analyze the impacts of the international income, price and monetary shocks on real GDP, household consumption and consumer prices index in 17 African countries using a SVAR model for the period 1970-2007. The research methodology adopted in this study suggests that 16 countries are exposed to the international income shock, nine to the international price shock and 10 to the international monetary shock. A decrease in real OECD GDP has a negative impact on real GDP, household consumption and consumer prices index, and inversely in the case of an increase. A decrease in current Federal funds effective rate has a positive effect on those variables, and inversely. World price of oil impacts essentially African oil producers, with a decrease affecting negatively their economies and an increase positively. The second one is to compare African economies' orthogonal impulse response functions to those international shocks. It can be observed that the functions tend to be similar in the cases of the real GDP and household consumption's reactions, and more or less similar in the case of the consumer prices index responses. This analysis emphasizes that the possibility of creating an economic union in Africa with a common currency does exist.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by HAL in its series Working Papers with number hal-00851594.
Date of creation: 26 May 2013
Date of revision:
Note: View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00851594
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/
African economies; international income; price and monetary shocks; SVAR model;
This paper has been announced in the following NEP Reports:
- NEP-AFR-2013-08-31 (Africa)
- NEP-ALL-2013-08-31 (All new papers)
- NEP-MON-2013-08-31 (Monetary Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Céline Gimet, 2007. "L'impact des chocs externes dans les économies du Mercosur: un modèle VAR Structurel," Post-Print halshs-00356105, HAL.
- Naudé, Wim & Saayman, Andrea, 2005. "Determinants of tourist arrivals in Africa: a panel data regression analysis," MPRA Paper 16479, University Library of Munich, Germany.
- 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.
- Kiyotaka Sato & Zhaoyong Zhang & Michael McAleer, 2010.
"Identifying Shocks in Regionally Integrated East Asian Economies with Structural VAR and Block Exogeneity,"
Working Papers in Economics
10/23, University of Canterbury, Department of Economics and Finance.
- Sato, Kiyotaka & Zhang, Zhaoyong & McAleer, Michael, 2011. "Identifying shocks in regionally integrated East Asian economies with structural VAR and block exogeneity," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 81(7), pages 1353-1364.
- Kiyotaka Sato & Zhaoyong Zhang & Michael McAleer, 2009. "Identifying Shocks in Regionally Integrated East Asian Economies with Structural VAR and Block Exogeneity," CIRJE F-Series CIRJE-F-694, CIRJE, Faculty of Economics, University of Tokyo.
- Sato, K. & Zhang, Z. & McAleer, M.J., 2010. "Identifying Shocks in Regionally Integrated East Asian Economies with Structural VAR and Block Exogeneity," Econometric Institute Research Papers EI 2010-09, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- Sato, K. & Zhang, Z. & McAleer, M.J., 2009. "Identifying Shocks in Regionally Integrated East Asian Economies with Structural VaR and Block Exogeneity," Econometric Institute Research Papers EI 2009-49, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- M. Ayhan Kose & Raymond Riezman, 1999.
"Trade Shocks and Macroeconomic Fluctuations in Africa,"
CSGR Working papers series
43/99, Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick.
- Kose, M. Ayhan & Riezman, Raymond, 2001. "Trade shocks and macroeconomic fluctuations in Africa," Journal of Development Economics, Elsevier, vol. 65(1), pages 55-80, June.
- M. Ayhan Kose & Raymond Riezman, 1999. "Trade Shocks and Macroeconomic Fluctuations in Africa," CESifo Working Paper Series 203, CESifo Group Munich.
- Steven Buigut, 2004. "Seigniorage and the Proposed East Africa Community (EAC) Monetary Union," The African Finance Journal, Africagrowth Institute, vol. 6(2), pages 36-46.
- Raju Jan Singh & Markus Haacker & Kyung-woo Lee & Ma�lan Le Goff, 2011.
"Determinants and Macroeconomic Impact of Remittances in Sub-Saharan Africa,"
Journal of African Economies,
Centre for the Study of African Economies (CSAE), vol. 20(2), pages 312-340, March.
- Raju Jan Singh & Kyung-woo Lee & Markus Haacker, 2009. "Determinants and Macroeconomic Impact of Remittances in Sub-Saharan Africa," IMF Working Papers 09/216, International Monetary Fund.
- Giscard Assoumou Ella, 2012. "Responses of African economies to the international economic shocks: an empirical study," Working Papers hal-00721633, HAL.
- Celine Gimet, 2007. "L'impact des chocs externes dans les economies du Mercosur : un modele var structurel," Economie Internationale, CEPII research center, issue 110, pages 107-136.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD).
If references are entirely missing, you can add them using this form.