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African Monetary Unions - Dominated by the North? Comment on 'The Common Monetary Area' by Martina Metzger and 'The CFA-Zone' by Jan Suchanek


  • Kohnert, Dirk


Monetary coordination is high on the agenda of different regional organizations in Africa. Economic benefits of a common currency, like lower transaction cost, increased macroeconomic stability, or the shielding of central banks against political pressure from nationalist elites and their inclination for excessive spending are undoubtedly expected. But the most important underlying aim of monetary integration in Africa is derived from its history, particularly the legacy of the slave trade and colonialism, and the subsequent strive for pan-African ideals, which has become manifest in the promotion of African unity in a crisis prone continent. However, whether it is feasible to achieve this ambitious political aim with economic means of regional economic and monetary cooperation, is open to question. Experts and the international donor community periodically caution about diverting attention from the most pressing needs of African countries by pursuing over-ambitious monetary policies. African governments should get the priorities right, i.e. they ought to implement first sustainable solutions to the problems of crisis resolution and prevention, the fight against corruption and rent-seeking elites, in order to promote good governance, transparency and accountability. The realities of African economies suggest that the grand new projects of monetary unions are unlikely to succeed. In addition, it is questionable whether economic, result-orientated reasoning and the discussion of monetary concepts (e.g. that of the Optimum Currency Area or of the Original Sin), which might be duly applied to Western or Latin American societies, have the same relevance in the African context.

Suggested Citation

  • Kohnert, Dirk, 2005. "African Monetary Unions - Dominated by the North? Comment on 'The Common Monetary Area' by Martina Metzger and 'The CFA-Zone' by Jan Suchanek," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 177-187.
  • Handle: RePEc:zbw:espost:118646

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    References listed on IDEAS

    1. Hansen, Gary D., 1985. "Indivisible labor and the business cycle," Journal of Monetary Economics, Elsevier, vol. 16(3), pages 309-327, November.
    2. Benhabib, Jess & Rogerson, Richard & Wright, Randall, 1991. "Homework in Macroeconomics: Household Production and Aggregate Fluctuations," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1166-1187, December.
    3. Aleksandar Vasilev, 2017. "Us Health And Aggregate Fluctuations," Bulletin of Economic Research, Wiley Blackwell, vol. 69(2), pages 147-163, April.
    4. Rogerson, Richard, 1988. "Indivisible labor, lotteries and equilibrium," Journal of Monetary Economics, Elsevier, vol. 21(1), pages 3-16, January.
    5. Christiano, Lawrence J & Eichenbaum, Martin, 1992. "Current Real-Business-Cycle Theories and Aggregate Labor-Market Fluctuations," American Economic Review, American Economic Association, vol. 82(3), pages 430-450, June.
    6. Alice Albonico & Sarantis Kalyvitis & Evi Pappa, 2012. "Revisiting the “Productivity-Hours Puzzle” in the RBC Paradigm: The Role of Investment Adjustment Costs," Quaderni di Dipartimento 164, University of Pavia, Department of Economics and Quantitative Methods.
    7. Aleksandar Vasilev, 2016. "Aggregation with a mix of indivisible and continuous labor supply decisions: The case of home production," International Journal of Social Economics, Emerald Group Publishing, vol. 43(12), pages 1507-1512, December.
    8. McGrattan, Ellen R & Rogerson, Richard & Wright, Randall, 1997. "An Equilibrium Model of the Business Cycle with Household Production and Fiscal Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 267-290, May.
    9. Bornukova, Kateryna, 2009. "Real Business Cycles in The Model with Two-Person Household and Home Production," MPRA Paper 25113, University Library of Munich, Germany.
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    More about this item


    Monetary Union; Optimum Currency Area; CFA Zone; CMA; Sub-Saharan Africa; Neocolonialism; Common Monetary Area;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
    • N97 - Economic History - - Regional and Urban History - - - Africa; Oceania
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development


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