Advanced Search
MyIDEAS: Login

Choice of Monetary and Exchange Regimes in ECOWAS: An Optimum Currency Area Analysis

Contents:

Author Info

  • Chantal Dupasquier

    (UN Economic Commission for Africa)

  • Patrick N. Osakwe

    ()
    (UN Economic Commission for Africa)

  • Shandre M. Thangavelu

    (Department of Economics, National University of Singapore)

Abstract

There are plans by five West African countries to establish a second monetary zone in the sub-region by December 2009. In this paper we ask whether a monetary union is the appropriate exchange rate regime for the sub-region based on economic criteria. We address the issue using a rigorous theoretical framework that captures the crucial trade-off between the savings in transaction costs, resulting from a common currency, and the macroeconomic stabilization benefits of a flexible exchange rate regime. The main result is that a flexible exchange rate regime dominates a monetary union in the ECOWAS subregion.

Download Info

If 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.
File URL: http://www.fas.nus.edu.sg/ecs/pub/wp-scape/0510.pdf
Download Restriction: no

Bibliographic Info

Paper provided by National University of Singapore, Department of Economics, SCAPE in its series SCAPE Policy Research Working Paper Series with number 0510.

as in new window
Length:
Date of creation: Jul 2005
Date of revision:
Handle: RePEc:sca:scaewp:0510

Contact details of provider:
Web page: http://www.fas.nus.edu.sg/ecs/scape/index.html
More information through EDIRC

Related research

Keywords: Exchange rates; Regimes; Welfare; Transaction costs; West Africa;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Buiter, Willem H & Corsetti, Giancarlo & Pesenti, Paolo, 1995. "A Centre-Periphery Model of Monetary Coordination and Exchange Rate Crises," CEPR Discussion Papers 1201, C.E.P.R. Discussion Papers.
  2. Maurice Obstfeld & Kenneth Rogoff, 1995. "The Mirage of Fixed Exchange Rates," NBER Working Papers 5191, National Bureau of Economic Research, Inc.
  3. repec:fth:caldav:99-1(a is not listed on IDEAS
  4. Marc Klau, 1998. "Exchange rate regimes and inflation and output in Sub-Saharan countries," BIS Working Papers 53, Bank for International Settlements.
  5. Patrick N. Osakwe & Lawrence L. Schembri, 1999. "Real Effects of Collapsing Exchange Rate Regimes: An Application to Mexico," Carleton Economic Papers 99-07, Carleton University, Department of Economics, revised Aug 2002.
  6. Honohan, Patrick & Lane, Philip R., 2000. "Will the Euro trigger more monetary unions in Africa?," Policy Research Working Paper Series 2393, The World Bank.
  7. Stasavage, David, 1997. "The CFA Franc Zone and Fiscal Discipline," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 6(1), pages 132-67, March.
  8. Guillaume, Dominique M. & Stasavage, David, 2000. "Improving Policy Credibility: Is There a Case for African Monetary Unions?," World Development, Elsevier, vol. 28(8), pages 1391-1407, August.
  9. Catherine A. Pattillo & Paul R. Masson, 2001. "Monetary Union in West Africa: An Agency of Restraint for Fiscal Policies," IMF Working Papers 01/34, International Monetary Fund.
  10. 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.
  11. Frankel, Jeffrey A & Rose, Andrew K, 1998. "The Endogeneity of the Optimum Currency Area Criteria," Economic Journal, Royal Economic Society, vol. 108(449), pages 1009-25, July.
  12. Steven B. Kamin & Marc Klau, 1997. "Some multi-country evidence on the effects of real exchange rates on output," BIS Working Papers 48, Bank for International Settlements.
  13. Lane, P, 1999. "Asymmetric Shocks and Monetary Policy in a Currency Union," Trinity Economics Papers 994, Trinity College Dublin, Department of Economics.
  14. Crow, J., 1999. "Any Sense in a Canadian Dollar?," Papers 99-1(a), California Davis - Institute of Governmental Affairs.
  15. Patrick Honohan & Stephen A. O'Connell, 1997. "Contrasting Monetary Regimes in Africa," IMF Working Papers 97/64, International Monetary Fund.
  16. Canzoneri, Matthew B & Gray, Jo Anna, 1985. "Monetary Policy Games and the Consequences of Non-cooperative Behavior," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(3), pages 547-64, October.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. 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.
  2. Balogun, Emmanuel Dele, 2008. "An Empirical Test of Trade Gravity Model Criteria for the West African Monetary Zone (WAMZ)," MPRA Paper 7083, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:sca:scaewp:0510. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.