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The Common Monetary Area in Southern Africa; Shocks, Adjustment, and Policy Challenges

  • Iyabo Masha
  • Leighton S Harris
  • Jian-Ye Wang
  • Kazuko Shirono
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    This study assesses the experience of the Common Monetary Area (CMA) based on available empirical evidence over the last two decades. It pays particular attention to member countries' adjustment to economic shocks in recent years and the inter-country linkages, including the spillover effects of policies. The paper draws the main lessons from the CMA experience, identifies key policy challenges, and discusses the issues facing the member countries in their efforts to achieve sustained growth. Implications for further economic integration in a broader regional context are also noted.

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    Paper provided by International Monetary Fund in its series IMF Working Papers with number 07/158.

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    Length: 63
    Date of creation: 01 Jul 2007
    Date of revision:
    Handle: RePEc:imf:imfwpa:07/158
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    1. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
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    3. World Bank, 2004. "Lesotho : Financial Sector Review," World Bank Other Operational Studies 14537, The World Bank.
    4. Honohan, Patrick, 1992. "Price and monetary convergence in currency unions: The franc and rand zones," Journal of International Money and Finance, Elsevier, vol. 11(4), pages 397-410, August.
    5. Ronald MacDonald & Luca A Ricci, 2003. "Estimation of the Equilibrium Real Exchange Rate for South Africa," IMF Working Papers 03/44, International Monetary Fund.
    6. Cobham, David & Robson, Peter, 1994. "Monetary integration in Africa: A deliberately European perspective," World Development, Elsevier, vol. 22(3), pages 285-299, March.
    7. Anthony M Annett, 2006. "Enforcement and the Stability and Growth Pact; How Fiscal Policy Did and Did Not Change Under Europe’s Fiscal Framework," IMF Working Papers 06/116, International Monetary Fund.
    8. X. P. Guma*, 1985. "The Rand Monetary Area Agreement," South African Journal of Economics, Economic Society of South Africa, vol. 53(2), pages 109-120, 06.
    9. Sachs, Jeffrey & Sala-i-Martin, Xavier, 1992. "Fiscal Federalism and Optimum Currency Areas: Evidence for Europe from the United States," CEPR Discussion Papers 632, C.E.P.R. Discussion Papers.
    10. Meshack Tjirongo, 1995. "Short-term stabilization versus long-term price stability: evaluating Namibia's membership of the Common Monetary Area," CSAE Working Paper Series 1995-18, Centre for the Study of African Economies, University of Oxford.
    11. Guillaumont, Patrick & Guillaumont, Sylviane & Plane, Patrick, 1988. "Participating in African monetary unions: An alternative evaluation," World Development, Elsevier, vol. 16(5), pages 569-576, May.
    12. Hannah Nielsen & Ebson Uanguta & Sylvanus Ikhide, 2005. "Financial Integration In The Common Monetary Area," South African Journal of Economics, Economic Society of South Africa, vol. 73(4), pages 710-721, December.
    13. Catherine A Pattillo & Paul R Masson, 2001. "Monetary Union in West Africa (ECOWAS)," IMF Occasional Papers 204, International Monetary Fund.
    14. Martin Grandes, 2003. "Macroeconomic Convergence in Southern Africa: The Rand Zone Experience," OECD Development Centre Working Papers 231, OECD Publishing.
    15. Owen F. Humpage & Jean M. McIntire, 1995. "An introduction to currency boards," Economic Review, Federal Reserve Bank of Cleveland, issue Q II, pages 2-11.
    16. Devarajan, Shantayanan & de Melo, Jaime, 1987. "Evaluating participation in African monetary unions: A statistical analysis of the CFA Zones," World Development, Elsevier, vol. 15(4), pages 483-496, April.
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