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Cape Verde: The Case For Euroisation

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  • Joao Loureiro
  • Manuel m.f. Martins
  • Ana paula Ribeiro

Abstract

After a decade of a successful peg to the euro, the authorities of Cape Verde are considering the official euroisation of the country. For an "ex ante" economic evaluation of such a move, this paper assesses whether Cape Verde fulfills key economic criteria devised by the optimum currency areas literature, using as benchmark the comparable records of the 27 European Union (EU) countries. The answer is positive. Overall, we find that Cape Verde is not less suited for euroisation than some of the current euro area members and most of the remaining members of the EU. Copyright (c) 2010 The Authors. Journal compilation (c) 2010 Economic Society of South Africa.

Suggested Citation

  • Joao Loureiro & Manuel m.f. Martins & Ana paula Ribeiro, 2010. "Cape Verde: The Case For Euroisation," South African Journal of Economics, Economic Society of South Africa, vol. 78(3), pages 248-268, September.
  • Handle: RePEc:bla:sajeco:v:78:y:2010:i:3:p:248-268
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    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles

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