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Trade Intensity and Business Cycle Synchronicity in Africa

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  • S. Jules-Armand Tapsoba

Abstract

Business cycle synchronicity, which is the key requirement for sharing a common currency, is not particularly strong within the prospective African monetary unions. However, this parameter is not irrevocably fixed and may be endogeneous vis-à-vis the integration process. For example, trade may increase the similarity of economic disturbances. This paper tests such an effect among the 53 African countries from 1965 to 2004. The estimated results suggest that trade intensity increases the synchronisation of business cycles in the African context. The magnitude of the 'endogeneity effect' is, however, smaller than similar estimates among industrial countries. Copyright 2009 The author 2008. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org, Oxford University Press.

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  • S. Jules-Armand Tapsoba, 2009. "Trade Intensity and Business Cycle Synchronicity in Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 18(2), pages 287-318, March.
  • Handle: RePEc:oup:jafrec:v:18:y:2009:i:2:p:287-318
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    Cited by:

    1. Simplice Asongu & Jacinta C. Nwachukwu, 2017. "Openness, ICT and Entrepreneurship in Sub-Saharan Africa," Working Papers 17/032, African Governance and Development Institute..
    2. Vanessa Simen Tchamyou, 2017. "The Role of Knowledge Economy in African Business," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(4), pages 1189-1228, December.
    3. Asongu, Simplice & Tchamyou, Vanessa, 2015. "The Impact of Entrepreneurship on Knowledge Economy in Africa," MPRA Paper 70237, University Library of Munich, Germany, revised Aug 2015.
    4. Fabrizio Carmignani, 2010. "Endogenous Optimal Currency Areas: the Case of the Central African Economic and Monetary Community," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 19(1), pages 25-51, January.
    5. Emilio Espino & Julian Kozlowski & Juan M. Sánchez, 2013. "Regionalization vs. globalization," Working Papers 2013-002, Federal Reserve Bank of St. Louis.
    6. Adama BAH & Sampawende Jules TAPSOBA, 2010. "Civil Conflicts and Regional Economic Integration Outcomes in Africa," Working Papers 201009, CERDI.
    7. Zuzana Brixiova & Qingwei Meng & Mthuli Ncube, 2015. "Can Intra-Regional Trade Act as a Global Shock Absorber in Africa?," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 16(3), pages 141-162, July.
    8. Hideaki Hirata & M. Ayhan Kose & Chris Otrok, "undated". "Regionalization vs. Globalization," Working Paper 164456, Harvard University OpenScholar.
    9. Adolfo Barajas & Ralph Chami & Christian H Ebeke & Sampawende J Tapsoba, 2012. "Workers’ Remittances; An Overlooked Channel of International Business Cycle Transmission?," IMF Working Papers 12/251, International Monetary Fund.
    10. Simplice Asongu & Nicholas Biekpe, 2017. "Mobile Phone Innovation and Entrepreneurship in Sub-Saharan Africa," Working Papers 17/023, African Governance and Development Institute..
    11. Sampawende Jules TAPSOBA, 2009. "Union Monétaire en Afrique de l’Ouest: Quelles Réponses à l’Hétérogénéité des Chocs ?," Working Papers 200912, CERDI.
    12. Oumar Diallo & Sampawende J.-A. Tapsoba, 2016. "Rising BRIC and Changes in Sub-Saharan Africa's Business Cycle Patterns," The World Economy, Wiley Blackwell, vol. 39(2), pages 260-284, February.
    13. Sampawende Jules Tapsoba, 2011. "Union Monétaire en Afrique de l'Ouest: Quelles Réponses à l'Hétérogénéité des Chocs ?," Working Papers halshs-00554309, HAL.
    14. Mulatu F. Zehirun & Marthinus C. Breitenbach & Francis M. Kemegue, 2015. "Assessment of Monetary Union in SADC: Evidence from Cointegration and Panel Unit Root Tests," Working Papers 201502, University of Pretoria, Department of Economics.
    15. Willie Lahari, 2011. "Assessing Business Cycle Synchronisation - Prospects for a Pacific Islands Currency Union," Working Papers 1110, University of Otago, Department of Economics, revised Oct 2011.
    16. Mulatu F. Zerihun & Marthinus C. Breitenbach & Francis Kemegue, 2014. "A Greek Wedding In SADC? Testing For Structural Symmetry Towards SADC Monetary Integration," The African Finance Journal, Africagrowth Institute, vol. 16(2), pages 16-33.
    17. Martínez-Zarzoso, Inmaculada, 2017. "The Euro and the CFA Franc: Evidence of sectoral trade effects," Center for European, Governance and Economic Development Research Discussion Papers 311, University of Goettingen, Department of Economics.
    18. Gammadigbé, Vigninou, 2013. "Endogénéité des critères d'une zone monétaire optimale: un réexamen
      [Endogeneity of the optimum currency area criteria: a re-examination]
      ," MPRA Paper 46727, University Library of Munich, Germany.
    19. J. Acalin & B. Cabrillac & G. Dufrénot & L. Jacolin & S. Diop, 2015. "Financial integration and growth correlation in Sub-Saharan Africa," Working papers 561, Banque de France.
    20. Asongu, Simplice & Nwachukwu, Jacinta, 2016. "Mobile phones, Institutional Quality and Entrepreneurship in Sub-Saharan Africa," MPRA Paper 76590, University Library of Munich, Germany.

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