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Endogenous Optimal Currency Areas: the Case of the Central African Economic and Monetary Community

  • Fabrizio Carmignani

The Central African Economic and Monetary Community (CAEMC) has been a monetary union for several decades now. According to the hypothesis of endogenous optimal currency areas (OCAs), the degree of business cycle synchronisation across its member states should be significantly higher today than forty years ago. This paper examines cycle synchronisation along three different statistical dimensions and shows that (i) synchronisation has remained low throughout the period 1960--2007, but (ii) it has marginally increased over time. These findings have important implications for the design of the economic integration process in Africa. A chronology of business cycles in CAEMC countries is provided. Copyright 2010 The author 2009. 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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Article provided by Centre for the Study of African Economies (CSAE) in its journal Journal of African Economies.

Volume (Year): 19 (2010)
Issue (Month): 1 (January)
Pages: 25-51

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Handle: RePEc:oup:jafrec:v:19:y:2010:i:1:p:25-51
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  9. Belke, Ansgar, 2007. "Endogenous Optimum Currency Areas and the Blend of Sectors – On the Determinants of Business Cycle Correlation across European Regions," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 22, pages 26-49.
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  18. Morten O. Ravn & Harald Uhlig, 2002. "On adjusting the Hodrick-Prescott filter for the frequency of observations," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 371-375.
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