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What is Fuzzy About Clustering in West Africa?

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  • Mahvash S Qureshi
  • Mr. Charalambos G Tsangarides

Abstract

Applying techniques of clustering analysis to a set of variables suggested by the convergence criteria and the theory of optimal currency areas, this paper looks for country homogeneities to assess membership in the existing and proposed monetary unions of the broader west African region. Our analysis reveals considerable dissimilarities in the economic characteristics of the countries in west and central Africa. In particular, the West African Monetary Zone (WAMZ) countries do not form a cluster with the West Africa Economic and Monetary Union (WAEMU) countries; and, within the WAMZ, there is a significant lack of homogeneity. Furthermore, when west and central African countries are considered together, we find significant heterogeneities within the CFA franc zone, and some interesting similarities between the Economic and Monetary Community of Central Africa (CEMAC) and WAMZ countries. Overall, our findings raise some questions about the geographical boundaries of several existing and proposed monetary unions.

Suggested Citation

  • Mahvash S Qureshi & Mr. Charalambos G Tsangarides, 2006. "What is Fuzzy About Clustering in West Africa?," IMF Working Papers 2006/090, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2006/090
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    Cited by:

    1. Jules-Armand Tapsoba, 2009. "West African Monetary Integration and Interstates Risk-Sharing," Post-Print hal-00460111, HAL.
    2. Sampawende Jules Tapsoba, 2011. "West African Monetary Integration and Interstates Risk-Sharing," CERDI Working papers halshs-00553244, HAL.
    3. Ms. Katrin Elborgh-Woytek & Mr. Julian Berengaut, 2006. "Beauty Queens and Wallflowers: Currency Unions in the Middle East and Central Asia," IMF Working Papers 2006/226, International Monetary Fund.
    4. Khalifa Hassanain, 2015. "Special Drawing Right and Currency Risk Management," International Journal of Economics and Financial Issues, Econjournals, vol. 5(3), pages 780-785.
    5. Jimoh Olakunle SAKA & Ibiyemi Ajoke ONAFOWOKAN & Adekunle Ademayowa ADEBAYO, 2015. "Analysis of Convergence Criteria in a Proposed Monetary Union: A Study of the Economic Community of West African States," International Journal of Economics and Financial Issues, Econjournals, vol. 5(1), pages 230-239.
    6. Sampawende Jules Tapsoba, 2011. "Union Monétaire en Afrique de l'Ouest: Quelles Réponses à l'Hétérogénéité des Chocs ?," CERDI Working papers halshs-00554309, HAL.
    7. Sampawende Jules TAPSOBA, 2009. "Union Monétaire en Afrique de l’Ouest: Quelles Réponses à l’Hétérogénéité des Chocs ?," Working Papers 200912, CERDI.
    8. Buigut, Steven & Valev, Neven T., 2009. "Benefits from Mutual Restraint in a Multilateral Monetary Union," World Development, Elsevier, vol. 37(3), pages 585-594, March.
    9. Sampawende Jules Tapsoba, 2011. "Union Monétaire en Afrique de l'Ouest: Quelles Réponses à l'Hétérogénéité des Chocs ?," Working Papers halshs-00554309, HAL.
    10. Alexandra Ferreira-Lopes & Álvaro Pina, 2011. "Business Cycles, Core, and Periphery in Monetary Unions: Comparing Europe and North America," Open Economies Review, Springer, vol. 22(4), pages 565-592, September.
    11. Daniel Agyapong & Anokye M. Adam, 2012. "Exchange Rate Behaviour: Implication for West African Monetary Zone," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 2(4), pages 215-228, October.
    12. Vigninou Gammadigbe & Sokhna Bousso Dioum, 2022. "Monetary integration in West Africa: Are business cycles converging?," African Development Review, African Development Bank, vol. 34(1), pages 68-80, March.
    13. Eléazar Zerbo & Olivier Darné, 2018. "Unit root and trend breaks in per capita output: evidence from sub-Saharan African countries," Applied Economics, Taylor & Francis Journals, vol. 50(6), pages 634-658, February.
    14. Adjalala, Frida & Dissou, Yazid, 2023. "Idiosyncratic shocks in a currency union: Insights from West Africa," Economic Modelling, Elsevier, vol. 122(C).
    15. Gilles Duffrenot & Kimiko Sugimoto, 2010. "Pegging the future West African single currency in regard to internal/external competitiveness: a counterfactual analysis," William Davidson Institute Working Papers Series wp974, William Davidson Institute at the University of Michigan.

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    WP; WAMZ country; exchange rate;
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