Real and Monetary Policy Convergence: EMU Crisis to the CFA Zone
Purpose – A major lesson of the EMU crisis is that serious disequilibria result from regional monetary arrangements not designed to be robust to a variety of shocks. The purpose of this paper is to assess these disequilibria within the CEMAC, UEMOA and CFA zones. Design/methodology/approach – In the assessments, monetary policy targets inflation and financial dynamics of depth, efficiency, activity and size while real sector policy targets economic performance in terms of GDP growth. We also provide the speed of convergence and time required to achieve a 100% convergence. Findings – But for financial intermediary size within the CFA zone, findings for the most part support only unconditional convergence. There is no form of convergence within the CEMAC zone. Practical implications – The broad insignificance of conditional convergence results have substantial policy implications. Monetary and real policies which are often homogenous for member states are thwarted by heterogeneous structural and institutional characteristics which give rise to different levels and patterns of financial intermediary development. Therefore member states should work towards harmonizing cross-country differences in structural and institutional characteristics that hamper the effectiveness of monetary policies. Originality/value – The paper provides warning signs to the CFA zone in the heat of the Euro zone crises.
|Date of creation:||19 Jan 2012|
|Date of revision:|
|Publication status:||Published in the Journal of Financial Economic Policy|
|Contact details of provider:|| Web page: http://www.afridev.org/index.php/en/|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Weill, Laurent, 2009.
"Convergence in banking efficiency across European countries,"
Journal of International Financial Markets, Institutions and Money,
Elsevier, vol. 19(5), pages 818-833, December.
- Laurent Weill, 2008. "Convergence in Banking Efficiency Across European Countries," Working Papers of LaRGE Research Center 2008-07, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
- Antonio Cosma & email@example.com & Michel Beine & Robert Vermeulen, 2009.
"The Dark Side of Global Integration: Increasing Tail Dependence,"
LSF Research Working Paper Series
09-05, Luxembourg School of Finance, University of Luxembourg.
- Beine, Michel & Cosma, Antonio & Vermeulen, Robert, 2010. "The dark side of global integration: Increasing tail dependence," Journal of Banking & Finance, Elsevier, vol. 34(1), pages 184-192, January.
- Michel Beine & Antonio Cosma & Robert Vermeulen, 2008. "The Dark Side of Global Integration: Increasing Tail Dependence," CREA Discussion Paper Series 08-03, Center for Research in Economic Analysis, University of Luxembourg.
- Simplice A. Asongu, 2014.
"Finance and Democracy in Africa,"
Institutions and Economies (formerly known as International Journal of Institutions and Economies),
Faculty of Economics and Administration, University of Malaya, vol. 6(3), pages 92-116, October.
- Islam, Nazrul, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1127-70, November.
- A. Bénassy-Quéré & Maylis Coupet, 2003.
"On the Adequacy of Monetary Arrangements in Sub-Saharian Africa,"
THEMA Working Papers
2003-38, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Agnès Bénassy-Quéré & Maylis Coupet, 2005. "On the Adequacy of Monetary Arrangements in Sub-Saharan Africa," The World Economy, Wiley Blackwell, vol. 28(3), pages 349-373, 03.
- Agnès Bénassy-Quéré & Maylis Coupet, 2003. "On the Adequacy of Monetary Arrangements in Sub-Saharian Africa," Working Papers 2003-11, CEPII research center.
- Robert J. Barro, 1989.
"Economic Growth in a Cross Section of Countries,"
NBER Working Papers
3120, National Bureau of Economic Research, Inc.
- Bruno, Giuseppe & De Bonis, Riccardo & Silvestrini, Andrea, 2012. "Do financial systems converge? New evidence from financial assets in OECD countries," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 141-155.
- Brada, Josef C. & Kutan, Ali M. & Zhou, Su, 2005. "Real and monetary convergence between the European Union's core and recent member countries: A rolling cointegration approach," Journal of Banking & Finance, Elsevier, vol. 29(1), pages 249-270, January.
- Asongu Simplice, 2011.
"Law and Finance in Africa,"
11/009, African Governance and Development Institute..
- Simplice A., Asongu, 2011.
"Law, finance, economic growth and welfare: why does legal origin matter?,"
33868, University Library of Munich, Germany.
- Asongu Simplice, 2011. "Law, finance, economic growth and welfare: why does legal origin matter?," Working Papers 11/007, African Governance and Development Institute..
- George M. von Furstenberg & Bang Nam Jeon, 1989. "International Stock Price Movements: Links and Messages," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1), pages 125-180.
- Asongu Simplice, 2011.
"New financial intermediary development indicators for developing countries,"
11/005, African Governance and Development Institute..
- Simplice A., Asongu, 2011. "New financial intermediary development indicators for developing countries," MPRA Paper 30921, University Library of Munich, Germany.
- Giuseppe Bruno & Riccardo De Bonis, 2009.
"Do Financial Systems Converge?: New Evidence from Household Financial Assets in Selected OECD Countries,"
OECD Statistics Working Papers
2009/1, OECD Publishing.
- Giuseppe Bruno & Riccardo De Bonis, 2009. "Do financial systems converge? New evidence from household financial assets in selected OECD countries," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Proceedings of the IFC Conference on "Measuring financial innovation and its impact", Basel, 26-27 August 2008, volume 31, pages 383-401 Bank for International Settlements.
- repec:srs:jarle2:1:v:2:y:2011:i:2:p:94-108 is not listed on IDEAS
- Casu, Barbara & Girardone, Claudia, 2010. "Integration and efficiency convergence in EU banking markets," Omega, Elsevier, vol. 38(5), pages 260-267, October.
- Bessler, David A. & Yang, Jian, 2003. "The structure of interdependence in international stock markets," Journal of International Money and Finance, Elsevier, vol. 22(2), pages 261-287, April.
- Narayan, Paresh Kumar & Mishra, Sagarika & Narayan, Seema, 2011.
"Do market capitalization and stocks traded converge? New global evidence,"
Journal of Banking & Finance,
Elsevier, vol. 35(10), pages 2771-2781, October.
- Sagarika Mishra & Paresh Kumar Narayan, 2010. "Do Market Capitalisation and Stocks Traded Converge? New Global Evidence," Economics Series 2010_11, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.
- Simplice A., Simplice, 2011.
"Why do French civil-law countries have higher levels of financial efficiency?,"
33950, University Library of Munich, Germany.
- Simplice A. ASONGU, 2011. "Why Do French Civil–Law Countries Have Higher Levels Of Financial Efficiency?," Journal of Advanced Research in Law and Economics, ASERS Publishing, vol. 0(2), pages 94-108, December.
- Asongu Simplice, 2011. "Why do French civil-law countries have higher levels of financial efficiency?," Working Papers 11/011, African Governance and Development Institute..
- Levy, Haim & Sarnat, Marshall, 1970. "International Diversification of Investment Portfolios," American Economic Review, American Economic Association, vol. 60(4), pages 668-75, September.
- Arellano, Manuel & Bond, Stephen, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Wiley Blackwell, vol. 58(2), pages 277-97, April.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- Fung, Michael K., 2009. "Financial development and economic growth: Convergence or divergence?," Journal of International Money and Finance, Elsevier, vol. 28(1), pages 56-67, February.
- Ross Levine, 2004.
"Finance and Growth: Theory and Evidence,"
NBER Working Papers
10766, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:agd:wpaper:12/033. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Asongu Simplice)
If references are entirely missing, you can add them using this form.