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Toward Maghreb monetary unification:what does the theory and history tell us?


  • Belhadj, Aam
  • bangake, Chrysost
  • Jedlane, NABIL


Since the beginning of the decade, numerous economic and monetary unification projects have aroused a lot of interest. The reinforcement of economic and monetary integration, especially in Europe, has set a trend for the creation of a monetary union in many others regions of the world. Since then, the debate has moved towards the study of the parameters that justify the creation of a single currency. However, another current of thought emphasized the fragility of the traditional theory and considered the criteria as incomplete, since this theory insists solely on a few elements concerning the adjustment process under various exchange regimes (Bogdan 2004). Also, many monetary unions have existed and lasted without meeting this theory’s criteria. Other economists recommend studying the history of these monetary unions so as to define the necessary conditions for the success of a monetary integration (Sharp 2005, Jonung 2002). Within Maghreb, the completion of the regional integration process, initiated in 1989 by the creation of the Arab Maghreb Union (AMU) and the establishment of the Maghreb monetary union would have a positive impact on economic growth, good governance and political stability. In this paper, we showed that the Maghreb Countries can not constitute a monetary block that satisfies the criteria of optimality. Moreover, the study of historical experiences also allowed us to verify that the MCs have to strengthen their political coordination and improve their budgetary and financial situations to establish a lasting monetary union. Finally, with the aim of a Maghreb monetary unification, we conclude with the idea that these countries have to make more efforts to gather economico-institutional conditions essential to the institution of one of the two preliminary proposed monetary systems, namely a pure float with inflation targeting or a currency board.

Suggested Citation

  • Belhadj, Aam & bangake, Chrysost & Jedlane, NABIL, 2007. "Toward Maghreb monetary unification:what does the theory and history tell us?," MPRA Paper 40375, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:40375

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    References listed on IDEAS

    1. Chinn, Menzie D. & Ito, Hiro, 2006. "What matters for financial development? Capital controls, institutions, and interactions," Journal of Development Economics, Elsevier, vol. 81(1), pages 163-192, October.
    2. Luca Antonio Ricci, 1997. "Un modèle simple de zone monétaire optimale," Économie et Prévision, Programme National Persée, vol. 128(2), pages 1-19.
    3. Xavier Debrun & Paul Masson & Catherine Pattillo, 2003. "West African Currency Unions: Rationale and Sustainability," CESifo Economic Studies, CESifo, vol. 49(3), pages 381-413.
    4. Nabil Jedlane, 2006. "Unification monétaire et Caisses d'émission au Maghreb," Post-Print halshs-00311911, HAL.
    5. George S. Tavlas, 2009. "Optimum-Currency-Area Paradoxes," Review of International Economics, Wiley Blackwell, vol. 17(3), pages 536-551, August.
    6. Gerald P. Dwyer & James R. Lothian, 2002. "International money and common currencies in historical perspective," FRB Atlanta Working Paper 2002-7, Federal Reserve Bank of Atlanta.
    7. Michael D. Bordo & Lars Jonung, 1999. "The Future of EMU: What Does the History of Monetary Unions Tell Us?," NBER Working Papers 7365, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Chrysost BANGAKE & Jean-Baptiste DESQUILBET & Nabil JEDLANE, 2008. "The Exchange Rate Regimes for Small Countries: an Application to the Maghreb Countries," LEO Working Papers / DR LEO 1601, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    2. Belhadj, Aam & Eggoh, Jude, 2010. "Co-movements Of Business Cycles In The Maghreb: Does Trade Matter?," MPRA Paper 35778, University Library of Munich, Germany.
    3. Belhadj, Aam, 2009. "Heterogeneity of the Maghreb: the results of optimized monetary rules," MPRA Paper 40374, University Library of Munich, Germany.

    More about this item


    Optimum Currency Area; Monetary Policy; Exchange rate policy; Maghreb;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination


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