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The Impact of Trade Integration on the Business Cycles Synchronization in West African Countries: Implications for the AfCFTA

Author

Listed:
  • Ahmed Racine Yago

    (Saint-Louis, Sénégal)

  • Samba Diop

    (Saint-Louis, Sénégal)

  • Cheikh Tidiane NDIAYE

    (Saint-Louis, Sénégal)

  • Simplice A. Asongu

    (Seoul, South Korea)

Abstract

This article analyzes the link between business cycles synchronization and trade integration using panel data for 15 West African countries from 2000 to 2020. Business cycles synchronization is a key requirement from the standpoint of establishing a common currency by 2027. We add to the body of literature by considering intra-industry trade and accounting for the effect of fiscal, monetary and exchange rate policies. Our results suggest that trade intensity is positively related to the synchronization of business cycles in West Africa. However, intra-industry trade is not the major factor explaining the co-movements of the business cycles. Indeed, our findings indicate that the enhancement of fiscal, monetary, and exchange rate coordination fosters the synchronization of business cycles. The study’s results have relevant policy implications for the proposed formation of a West African currency union.

Suggested Citation

  • Ahmed Racine Yago & Samba Diop & Cheikh Tidiane NDIAYE & Simplice A. Asongu, 2026. "The Impact of Trade Integration on the Business Cycles Synchronization in West African Countries: Implications for the AfCFTA," Working Papers 26/027, European Xtramile Centre of African Studies (EXCAS).
    • Handle: RePEc:exs:wpaper:26/027
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    Keywords

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    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F15 - International Economics - - Trade - - - Economic Integration
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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