IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Does regional currency integration ameliorate global macroeconomic shocks in sub-Saharan Africa? The case of the 2008-2009 global financial crisis

Listed author(s):
  • Gregory N. Price
  • Juliet U. Elu
Registered author(s):

    Purpose - – The purpose of this paper is to consider whether regional currency integration in sub-Saharan Africa ameliorates global macroeconomic shocks by considering the impact of the 2008-2009 global financial crisis on economic growth. This suggests that Central Africa Franc Zone (CFAZ) eurocurrency union membership amplifies the effects of global business cycles in sub-Saharan Africa. Design/methodology/approach - – The authors estimate the parameters of a quantity theory model of economic growth within a Generalized Estimating Equation (GEE) Framework. Findings - – Parameter estimates from GEE specifications reveal that the contraction in credit during the financial crisis of 2008-2009 had larger adverse growth effects on sub-Saharan African countries who were members of the CFAZ eurocurrency union. The authors also find that sub-Saharan African countries who were members of the CFAZ eurocurrency union were more likely to experience a contraction in credit. Originality/value - – As far as the authors can discern, no existing empirical growth models use a GEE framework to estimate parameters of interest. The GEE parameter estimates are distribution-free, robust with respect to unknown forms of heteroskedasticity, and control for a wide variety of error structures that can induce bias in panel data parameter estimates.

    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.emeraldinsight.com/10.1108/JES-08-2011-0092?utm_campaign=RePEc&WT.mc_id=RePEc
    Download Restriction: Access to full text is restricted to subscribers

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Emerald Group Publishing in its journal Journal of Economic Studies.

    Volume (Year): 41 (2014)
    Issue (Month): 5 (September)
    Pages: 737-750

    as
    in new window

    Handle: RePEc:eme:jespps:v:41:y:2014:i:5:p:737-750
    Contact details of provider: Web page: http://www.emeraldinsight.com

    Order Information: Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
    Web: http://www.emeraldinsight.com/jes.htm Email:


    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. Balogun, Emmanuel Dele, 2008. "An alternative reconsideration of macroeconomic convergence criteria for West African Monetary Zone," MPRA Paper 11367, University Library of Munich, Germany.
    2. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
    3. Augustin Kwasi Fosu, 2010. "The Global Financial Crisis and Development: Whither Africa?," WIDER Working Paper Series 124, World Institute for Development Economic Research (UNU-WIDER).
    4. Xavier Debrun & Paul Masson & Catherine Pattillo, 2003. "West African Currency Unions: Rationale and Sustainability," CESifo Economic Studies, CESifo, vol. 49(3), pages 381-413.
    5. Wei Pan, 2001. "Akaike's Information Criterion in Generalized Estimating Equations," Biometrics, The International Biometric Society, vol. 57(1), pages 120-125, 03.
    6. Jean–paul Azam & Augustin Fosu & Njuguna Ndung’u, 2002. "Explaining Slow Growth in Africa," African Development Review, African Development Bank, vol. 14(2), pages 177-220.
    7. Robert G. King & Mark W. Watson, 1997. "Testing long-run neutrality," Economic Quarterly, Federal Reserve Bank of Richmond, issue Sum, pages 69-101.
    8. Alberto Alesina & Robert J. Barro, 2002. "Currency Unions," The Quarterly Journal of Economics, Oxford University Press, vol. 117(2), pages 409-436.
    9. Ziesemer, Thomas H.W., 2010. "The impact of the credit crisis on poor developing countries: Growth, worker remittances, accumulation and migration," Economic Modelling, Elsevier, vol. 27(5), pages 1230-1245, September.
    10. Helmut Herwartz & Hans-Eggert Reimers, 2006. "Long-Run Links among Money, Prices and Output: Worldwide Evidence," German Economic Review, Verein für Socialpolitik, vol. 7, pages 65-86, 02.
    11. Henstridge, N M, 1999. "De-monetisation, Inflation and Coffee: The Demand for Money in Uganda," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 8(3), pages 345-385, October.
    12. Godwin Nwaobi, 2002. "A vector error correction and nonnested modeling of money demand function in Nigeria," Economics Bulletin, AccessEcon, vol. 3(4), pages 1-8.
    13. Uwaifo Oyelere, Ruth, 2010. "Africa's education enigma? The Nigerian story," Journal of Development Economics, Elsevier, vol. 91(1), pages 128-139, January.
    14. Abdoulaye Diop & Gilles Dufrénot & Gilles Sanon, 2010. "Is Per Capita Growth in Africa Hampered by Poor Governance and Weak Institutions? An Empirical Study on the ECOWAS Countries," African Development Review, African Development Bank, vol. 22(2), pages 265-275.
    15. Chor, Davin & Manova, Kalina, 2012. "Off the cliff and back? Credit conditions and international trade during the global financial crisis," Journal of International Economics, Elsevier, vol. 87(1), pages 117-133.
    16. Fielding, David & Shields, Kalvinder, 2001. "Modelling macroeconomic shocks in the CFA Franc Zone," Journal of Development Economics, Elsevier, vol. 66(1), pages 199-223, October.
    17. FOSU, Augustin Kwasi, 2008. "Democracy and growth in Africa: Implications of increasing electoral competitiveness," Economics Letters, Elsevier, vol. 100(3), pages 442-444, September.
    18. José Brambila-Macias & Isabella Massa, 2010. "The Global Financial Crisis and Sub-Saharan Africa: The Effects of Slowing Private Capital Inflows on Growth," African Development Review, African Development Bank, vol. 22(3), pages 366-377.
    19. Elizabeth Asiedu & James Freeman, 2009. "The Effect of Corruption on Investment Growth: Evidence from Firms in Latin America, Sub-Saharan Africa, and Transition Countries ," Review of Development Economics, Wiley Blackwell, vol. 13(2), pages 200-214, 05.
    20. Robert Barro & Silvana Tenreyro, 2007. "Economic Effects Of Currency Unions," Economic Inquiry, Western Economic Association International, vol. 45(1), pages 1-23, 01.
    21. Andrew Muhammad, 2009. "Would African Countries Benefit from the Termination of Kenya's Economic Partnership Agreement (EPA) with the EU? An Analysis of EU Demand for Imported Roses," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(1), pages 220-238.
    22. M. Brownbridge & C. Kirkpatrick, 2000. "Financial Regulation in Developing Countries," Journal of Development Studies, Taylor & Francis Journals, vol. 37(1), pages 1-24, October.
    23. James Cui, 2007. "QIC program and model selection in GEE analyses," Stata Journal, StataCorp LP, vol. 7(2), pages 209-220, June.
    24. Alemayehu Geda & Haile Kebret, 2008. "Regional Economic Integration in Africa: A Review of Problems and Prospects with a Case Study of COMESA," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 17(3), pages 357-394, June.
    25. Mihasonirina Andrianaivo & Charles Yartey, 2010. "Understanding the Growth of African Financial Markets," African Development Review, African Development Bank, vol. 22(3), pages 394-418.
    26. Augustin Kwasi Fosu, 2009. "Inequality and the Impact of Growth on Poverty: Comparative Evidence for Sub-Saharan Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 45(5), pages 726-745.
    27. Houssa, Romain, 2008. "Monetary union in West Africa and asymmetric shocks: A dynamic structural factor model approach," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 319-347, February.
    28. Xavier Debrun & Paul R. Masson & Catherine Pattillo, 2011. "Should African Monetary Unions Be Expanded? An Empirical Investigation of the Scope for Monetary Integration in Sub-Saharan Africa-super- †," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 20(suppl_2), pages -150, May.
    29. repec:ebl:ecbull:v:3:y:2002:i:4:p:1-8 is not listed on IDEAS
    30. Henri Ngoa Tabi & Henri Atangana Ondoa, 2011. "Inflation, Money and Economic Growth in Cameroon," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 2(1), pages 45-56, March.
    31. Emmanuel Anoruo, 2002. "Stability of the Nigerian M2 Money Demand Function in the SAP Period," Economics Bulletin, AccessEcon, vol. 14(3), pages 1-9.
    32. David Fielding, 1994. "Money Demand in Four African Countries," Journal of Economic Studies, Emerald Group Publishing, vol. 21(2), pages 3-37, May.
    33. Mohsen Bahmani-Oskooee & Abera Gelan, 2007. "On the Relation between Nominal Devaluation and Real Devaluation: Evidence from African Countries," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 16(2), pages 177-197, March.
    34. John Anyanwu, 2003. "Estimating the Macroeconomic Effects of Monetary Unions: The Case of Trade and Output," African Development Review, African Development Bank, vol. 15(2‐3), pages 126-145.
    35. Osili, Una Okonkwo, 2007. "Remittances and savings from international migration: Theory and evidence using a matched sample," Journal of Development Economics, Elsevier, vol. 83(2), pages 446-465, July.
    36. Kwabena Gyimah-Brempong & Marva E. Corley, 2005. "Civil Wars and Economic Growth in Sub-Saharan Africa1," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 14(2), pages 270-311, June.
    Full references (including those not matched with items on IDEAS)

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

    When requesting a correction, please mention this item's handle: RePEc:eme:jespps:v:41:y:2014:i:5:p:737-750. 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: (Virginia Chapman)

    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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.