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North-South Asymmetric Relationships : Does the EMU Business Affect Small African Economies ?

  • André, NYEMBWE
  • Konstantin, KHOLODILIN

In this paper we empirically investigate a possible transmission of the European business cycle to Sub-Saharan Africa’s economies. This linkage may be of interest because the EMU is the main trading partner of African countries, and many of these countries use the euro as either the official or a de facto anchor in order to keep the exchange rate fixed or stable. After identifying possible theoretical channels of transmission, we test whether the relevant economic variables in Africa are sensitive to the fluctuations of European economic activity. Using either a Euro area GDP series or a Stock and Watson approach in order to build indicators of economic fluctuations to Sub-Saharan Africa despite the appealing theoretical linkages between the two areas. The most important relationship we manage to disentangle is between the European and African monetary policies.

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Paper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2005032.

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Length: 40
Date of creation: 01 Aug 2005
Date of revision:
Handle: RePEc:ctl:louvec:2005032
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