The proposed eco: should West Africa proceed with a common currency?
AbstractThis paper investigates the rationality of proceeding with a common currency in West Africa by testing for symmetry and speed of adjustment to four underlying structural shocks among a pair of 66 ECOWAS economies. The findings reveal that there is relatively high degree of symmetry in the responses of the economies to external disturbances, while about 85 percent of the correlations in supply, demand and monetary shocks among the countries are asymmetric. The size of the shocks and speed of adjustment among countries are also dissimilar, suggesting that ECOWAS should not yet proceed with the eco, since the costs will outweigh the benefits.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 43739.
Date of creation: 07 Mar 2012
Date of revision:
Monetary union; Structural VAR; Optimal currency area; ECOWAS; West Africa;
Find related papers by JEL classification:
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
This paper has been announced in the following NEP Reports:
- NEP-AFR-2013-01-19 (Africa)
- NEP-ALL-2013-01-19 (All new papers)
- NEP-MON-2013-01-19 (Monetary Economics)
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