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On the feasibility of a monetary union in the Southern Africa Development Community

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Abstract

This paper investigates the feasibility of a monetary union in Southern Africa Development Community (SADC) by looking at evidence of nominal exchange rate and inflation convergence. Using a methodology based on estimating time varying parameters, the evidence suggests non-convergence. The non-convergence of nominal exchange rate and consumer price inflation suggests that presently, the chances of SADC member countries satisfying some form of Maastricht-type criteria is quite low.

Suggested Citation

  • Terence D.Agbeyegbe, 2003. "On the feasibility of a monetary union in the Southern Africa Development Community," Economics Working Paper Archive at Hunter College 306, Hunter College Department of Economics, revised 2003.
  • Handle: RePEc:htr:hcecon:306
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    1. Fabrizio Carmignani, 2010. "Endogenous Optimal Currency Areas: the Case of the Central African Economic and Monetary Community," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 19(1), pages 25-51, January.
    2. Akbari Dehbaghi, Simin & Arman, Seyed Aziz & Ahangari, Majid, 2020. "The Impact of Domestic and Foreign Monetary Policy on Iran\'s economy: Global Modeling," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 15(2), pages 151-180, April.
    3. Regmi, Krishna & Nikolsko-Rzhevskyy, Alex & Thornton, Robert, 2015. "To be or not to be: An optimum currency area for South Asia?," Journal of Policy Modeling, Elsevier, vol. 37(6), pages 930-944.
    4. Carlos Vieira & Isabel Vieira, 2013. "Monetary Integration In Eastern And Southern Africa: Choosing A Currency Peg For Comesa," South African Journal of Economics, Economic Society of South Africa, vol. 81(3), pages 356-372, September.
    5. Tchablemane Yenlide, 2020. "Possibilité d’une union monétaire dans la zone CEDEAO : Test de coordination des politiques budgétaires et monétaires," Working Papers hal-02560792, HAL.
    6. Mulatu F. Zehirun & Marthinus C. Breitenbach & Francis Kemegue, 2014. "Monetary Integration in SADC: Assessment of Policy Coordination and Real Effective Exchange Rate Stability," Working Papers 201473, University of Pretoria, Department of Economics.

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    More about this item

    Keywords

    Inflation and Exchange Rate Convergence in SADC.;

    JEL classification:

    • F1 - International Economics - - Trade
    • F3 - International Economics - - International Finance
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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