Persistence of Inflationary shocks: Implications for West African Monetary Union Membership
AbstractPlans are far advanced to form a second monetary union, the West African Monetary Zone (WAMZ), in Africa. While much attention is being placed on convergence criteria and preparedness of the five aspiring member states, less attention is being placed on the extent to which the dynamics of inflation in individual countries are (dis)similar. This paper aims to stimulate debate on the long term sustainability of the union by examining the dynamics of inflation within these countries. Using Fractional Integration (FI) methods, we establish that some significant differences exist among the countries. Shocks to inflation in Sierra Leone are non mean reverting; results for The Gambia, Ghana and Guinea-Bissau suggest some inflation persistence, despite being mean reverting. Some policy implications are discussed and some warnings are raised.
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Bibliographic InfoPaper provided by The University of Sheffield, Department of Economics in its series Working Papers with number 2010020.
Length: 22 pages
Date of creation: Nov 2010
Date of revision: Nov 2010
Inflationary shocks; fractional integration; stationarity; West Africa; Monetary unions;
Other versions of this item:
- Paul Alagidede & Simeon Coleman & Juan Carlos Cuestas, 2010. "Persistence of Inflationary Shocks: Implications for West African Monetary Union Membership," Working Papers 2010/8, Nottingham Trent University, Nottingham Business School, Economics Division.
- Alagidede, Paul & Coleman, Simeon & Cuestas, Juan Carlos, 2010. "Persistence of Inflationary shocks: Implications for West African Monetary Union Membership," Stirling Economics Discussion Papers 2010-11, University of Stirling, Division of Economics.
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-27 (All new papers)
- NEP-CBA-2010-11-27 (Central Banking)
- NEP-MON-2010-11-27 (Monetary Economics)
You can help add them by filling out this form.
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