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The West African Economic and Monetary Union and the African Growth and Opportunity Act: A Computable General Equilibrium Approach


  • Hounsou Remy

    (University of Abomey)

  • Michael J. Applegate

    (Oklahoma State University)


The countries of the West African Economic and Monetary Union (WAEMU) like the other Sub-Saharan African countries face the challenge of generating sustained economic growth. Among factors that contribute to this problem are the low degree of openness to trade and the lack of foreign capital. To encourage trade and investment in Sub-Saharan Africa, the United States passed the African Growth and Opportunity Act (AGOA). This paper develops and uses a Computable General Equilibrium model to determine the impacts of this act on WAEMU as a group. The results from the simulation of free-trade and an increase in foreign capital inflow show that the sectoral effects of these policies are considerable. At the macro level we see increases in the growth rate of real GDP, real investment, government revenues, total saving, and total consumption.

Suggested Citation

  • Hounsou Remy & Michael J. Applegate, 2008. "The West African Economic and Monetary Union and the African Growth and Opportunity Act: A Computable General Equilibrium Approach," Journal of Economic Insight (formerly the Journal of Economics (MVEA)), Missouri Valley Economic Association, vol. 34(1), pages 45-75.
  • Handle: RePEc:mve:journl:v:34:y:2008:i:1:p:45-75

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    References listed on IDEAS

    1. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, July.
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    Cited by:

    1. Zenebe, Addisalem & Peterson, Wesley & Wamisho, Kassu, 2014. "The Impact of the African Growth and Opportunity Act (AGOA): An Empirical Analysis of Sub-Saharan African Agricultural Exports," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170590, Agricultural and Applied Economics Association.

    More about this item

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa


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