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A Short-run Schumpeterian Trip to Embryonic African Monetary Zones

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  • Asongu Simplice

    (Yaoundé/Cameroun)

Abstract

With the spectre of the Euro crisis looming substantially large and scaring potential monetary unions, this study is a short-run trip to embryonic African monetary zones to assess the Schumpeterian thesis for positive spillovers of financial services on growth. Causality analysis is performed with seven financial development and three growth indicators in the proposed West African Monetary Zone (WAMZ) and East African Monetary Zone (EAMZ). The journey is promising for the EAMZ and lamentable for the WAMZ. Results of the EAMZ are broadly consistent with the traditional discretionary monetary policy arrangements while those of the WAMZ are in line with the non-traditional strand of regimes in which, policy instruments in the short-run cannot be used to offset adverse shocks to output. Policy implications are discussed.

Suggested Citation

  • Asongu Simplice, 2012. "A Short-run Schumpeterian Trip to Embryonic African Monetary Zones," Working Papers of the African Governance and Development Institute. 12/001, African Governance and Development Institute..
    • Handle: RePEc:agd:wpaper:12/001
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    Cited by:

    1. Simplice A Asongu, 2014. "On the substitution of institutions and finance in investment," Economics Bulletin, AccessEcon, vol. 34(3), pages 1557-1574.
    2. Simplice A, Asongu, 2011. "Finance and growth: Schumpeter might be wrong in our era. New evidence from Meta-analysis," MPRA Paper 32559, University Library of Munich, Germany, revised 07 Feb 2013.
    3. A. Asongu, Simplice & E. Folarin, Oludele & Biekpe, Nicholas, 2020. "The Long-Run Stability of Money in the ProposedE ast AfricanMonetary Union," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 35(3), pages 457-478.
    4. Asongu, Simplice A. & Folarin, Oludele E. & Biekpe, Nicholas, 2019. "The long run stability of money demand in the proposed West African monetary union," Research in International Business and Finance, Elsevier, vol. 48(C), pages 483-495.
    5. Nguena Christian Lambert & Tsafack Nanfosso Roger, 2014. "On the Sensitivity of Banking Activity Shocks: Evidence from the CEMAC Sub-region," Economics Bulletin, AccessEcon, vol. 34(1), pages 354-372.
    6. Olatunji A. Shobande & Oladimeji T. Shodipe & Simplice A. Asongu, 2019. "Global Shocks Alert and Monetary Policy Responses," Working Papers of the African Governance and Development Institute. 19/066, African Governance and Development Institute..
    7. Simplice Asongu, 2016. "New empirics of monetary policy dynamics: evidence from the CFA franc zones," African Journal of Economic and Management Studies, Emerald Group Publishing Limited, vol. 7(2), pages 164-204, June.
    8. Nguena, Christian Lambert, 2010. "Rethinking Pro-Growth Monetary Policy in Africa: Monetarist versus Keynesian Approach," MPRA Paper 52100, University Library of Munich, Germany, revised 08 Dec 2013.
    9. Asongu, Simplice A, 2013. "Finance and growth: New evidence from Meta-analysis," MPRA Paper 52210, University Library of Munich, Germany.
    10. Simplice Asongu, 2015. "Growth and Institutions in African Development, by Augustin K. Fosu," Working Papers of the African Governance and Development Institute. 15/033, African Governance and Development Institute..
    11. Simplice A. Asongu, 2014. "Correcting Inflation with Financial Dynamic Fundamentals: Which Adjustments Matter in Africa?," Journal of African Business, Taylor & Francis Journals, vol. 15(1), pages 64-73, April.
    12. Asongu Simplice, 2013. "Does Money Matter in Africa? New Empirics on Long- and Short-run Effects of Monetary Policy on Output and Prices," Working Papers of the African Governance and Development Institute. 13/005, African Governance and Development Institute..
    13. NGUENA, Christian L., 2011. "Heterogeneity of Saving-Investment Causality and Fiscal Coordination Implication: The Case of an African Monetary Union," MPRA Paper 49411, University Library of Munich, Germany, revised 31 Aug 2013.
    14. Asongu, Simplice & Nwachukwu, Jacinta & Tchamyou, Vanessa, 2017. "A summary of a survey on proposed African monetary unions," MPRA Paper 79637, University Library of Munich, Germany.
    15. Aweng Peter Majok Garang & Hatice Erkekoglu, 2020. "Business Cycles Synchronisation and Symmetries in the Transition to East African Monetary Union," South African Journal of Economics, Economic Society of South Africa, vol. 88(4), pages 495-517, December.
    16. Simplice Asongu & Jacinta Nwachukwu & Vanessa Tchamyou, 2017. "A Literature Survey On Proposed African Monetary Unions," Journal of Economic Surveys, Wiley Blackwell, vol. 31(3), pages 878-902, July.
    17. Samba Diop & Simplice A. Asongu, 2020. "An Index of African Monetary Integration (IAMI)," Working Papers of the African Governance and Development Institute. 20/003, African Governance and Development Institute..
    18. Mitoko, Jeremiah, 2021. "Economics of Microcredit-From current crisis to new possibilities," MPRA Paper 108392, University Library of Munich, Germany.
    19. Simplice A. Asongu & Vanessa S. Tchamyou, 2015. "Inequality, Finance and Pro-Poor Investment in Africa," Research Africa Network Working Papers 15/052, Research Africa Network (RAN).
    20. Christian-Lambert Lambert Nguena & Roger Tsafack-Nanfosso, 2014. "On the Sensitivity of Banking Activity to Macroeconomic Shocks: Evidence from CEMAC Sub-region [Sensibilité du Secteur Bancaire aux Chocs Macroéconomiques: Cas de la sous-région CEMAC]," Post-Print halshs-01097850, HAL.
    21. Asongu, Simplice A., 2014. "A note on the long-run neutrality of monetary policy: new empirics," European Economic Letters, European Economics Letters Group, vol. 3(1), pages 1-6.
    22. NGUENA, Christian L., 2012. "Pro Growth Monetary Policy in Africa: Monetarist versus Keynesian Approach," MPRA Paper 49410, University Library of Munich, Germany, revised 31 Aug 2013.
    23. Simplice Asongu, 2014. "REER Imbalances and Macroeconomic Adjustments in the Proposed West African Monetary Union," South African Journal of Economics, Economic Society of South Africa, vol. 82(2), pages 276-289, June.
    24. Christian Lambert Nguena & Roger Tsafack Nanfosso, 2013. "Facteurs Microeconomiques du Deficit de Financement des PME au Cameroun," AAYE Policy Research Working Paper Series 13_004, Association of African Young Economists, revised Nov 2013.

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    More about this item

    Keywords

    Finance; Growth; Africa;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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