Monetary Union in West Africa and Asymmetric Shocks: a Dynamic Structural Factor Model
We analyse the costs of a monetary union in West Africa by means of asymmetric aggregate demand and aggregate supply shocks. Previous studies have estimated the shocks with the VAR model. We discuss the limitations of this approach and apply a new technique based on the dynamic factor model. The results suggest the presence of economic costs for a monetary union in West Africa because aggregate supply shocks are poorly correlated or asymmetric across these countries. Aggregate demand shocks are more correlated between West African countries.
|Date of creation:||Mar 2004|
|Contact details of provider:|| Web page: http://feb.kuleuven.be/Economics/|
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- Newey, Whitney K & Powell, James L & Walker, James R, 1990.
"Semiparametric Estimation of Selection Models: Some Empirical Results,"
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American Economic Association, vol. 80(2), pages 324-328, May.
- Newey, W.K. & Powell, J.L. & Walker, J.R., 1990. "Semiparametric Estimation Of Selection Models: Some Empirical Results," Working papers 9001, Wisconsin Madison - Social Systems.
- Barrett, Christopher B., 1996. "On price risk and the inverse farm size-productivity relationship," Journal of Development Economics, Elsevier, vol. 51(2), pages 193-215, December. Full references (including those not matched with items on IDEAS)
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