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Synchronisation des chocs d'offre et de demande dans la Communauté Economique des Etats de l'Afrique de l'Ouest (CEDEAO)
[Synchronization of supply and demand shocks in the Economic Community of West African States (ECOWAS)]

Author

Listed:
  • Zouri, Stéphane

Abstract

This paper focuses on the synchronization of supply and demand shocks in West Africa given the willingness of ECOWAS Heads of State to create a single currency by 2020. Based on the methodology of Blanchard and Quah (1989), the paper relies on structural autoregressive vector models (SVAR) to identify these shocks in the region. Unlike previous works in this area, it is innovative as it proposes a new way of analyzing the dynamic correlation of shocks in the region. In addition, the proposed study makes it possible to analyze the adjustment dynamics of macroeconomic variables to different shocks. The results show that the economies of the zone are marked by relatively high degrees of asymmetry in the sense that the responses to the same type of shock are different. However, the paper shows that the synchronization of shocks evolves over time between the countries in the region. Thus, the paper indicates the need to take into account the dynamic aspect of shocks, since a monetary union considered from the outset to be expensive may over time become beneficial.

Suggested Citation

  • Zouri, Stéphane, 2019. "Synchronisation des chocs d'offre et de demande dans la Communauté Economique des Etats de l'Afrique de l'Ouest (CEDEAO) [Synchronization of supply and demand shocks in the Economic Community of We," MPRA Paper 95291, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:95291
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    References listed on IDEAS

    as
    1. Blanchard, Olivier Jean & Quah, Danny, 1989. "The Dynamic Effects of Aggregate Demand and Supply Disturbances," American Economic Review, American Economic Association, vol. 79(4), pages 655-673, September.
    2. Simplice Asongu, 2014. "Are proposed African monetary unions optimal currency areas? Real, monetary and fiscal policy convergence analysis," African Journal of Economic and Management Studies, Emerald Group Publishing Limited, vol. 5(1), pages 9-29, April.
    3. Ekong, Christopher N. & Onye, Kenneth U., 2012. "On The Feasibility of a Common Currency in West Africa: Evidence from a Multivariate Structural VAR," MPRA Paper 88357, University Library of Munich, Germany.
    4. Asongu Simplice, 2012. "Are Proposed African Monetary Unions Optimal Currency Areas? Real and Monetary Policy Convergence Analysis," Working Papers of the African Governance and Development Institute. 12/005, African Governance and Development Institute..
    5. Buigut, Steven K. & Valev, Neven T., 2005. "Is the proposed East African Monetary Union an optimal currency area? a structural vector autoregression analysis," World Development, Elsevier, vol. 33(12), pages 2119-2133, December.
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    8. Fidrmuc, Jarko & Korhonen, Iikka, 2003. "Similarity of supply and demand shocks between the euro area and the CEECs," Economic Systems, Elsevier, vol. 27(3), pages 313-334, September.
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    10. Axel A. Weber, 1990. "European Economic and Monetary Union and Asymmetries and Adjustment Problems in the European Monetary System: Some Empirical Evidence," Volkswirtschaftliche Diskussionsbeiträge 9-90, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    synchronization; macroeconomic shocks; structural VAR; ECOWAS;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F15 - International Economics - - Trade - - - Economic Integration
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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