West African Monetary Integration and Interstates Risk-Sharing

Sampawende Tapsoba

No 201002, Working Papers from CERDI

Abstract: There are continuing efforts at the monetary integration and unionization in West Africa. Several academics argue that a monetary union among West African states would be costly because of the magnitude of asymmetric shocks. A common monetary policy is inappropriate and ineffective to respond to divergent shocks. Therefore, the stability of such a union is critically dependent on risk-sharing mechanisms for achieving income insurance and consumption smoothing. A monetary union is still optimal if output stabilization mechanisms such as risk-sharing institutions, are in place to cope with asymmetric shocks. This article estimates risk-sharing channels among West African states from 1970 to 2004. It uses the definition of national accounts to measure the fraction of asymmetric output shocks smoothed via net factors income, net transfers and net saving. We find that compared to the OECD (Organization for Economic Cooperation and Development) estimates, the degree of risk-sharing among West African countries is quite low. We also obtain that net saving is the significant and stable risk-sharing channel. A further analysis shows that only the contribution of public saving is significant.

Keywords: Asymmetric shocks; Interstates Risk-sharing; West Africa (search for similar items in EconPapers)
Pages: 21
Date: 2010
New Economics Papers: this item is included in nep-afr and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://publi.cerdi.org/ed/2010/2010.02.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://publi.cerdi.org/ed/2010/2010.02.pdf [301 Moved Permanently]--> https://publi.cerdi.org/ed/2010/2010.02.pdf)

Related works:
Working Paper: West African Monetary Integration and Interstates Risk-Sharing (2011)
Working Paper: West African Monetary Integration and Interstates Risk-Sharing (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cdi:wpaper:1120

Access Statistics for this paper

More papers in Working Papers from CERDI Contact information at EDIRC.
Bibliographic data for series maintained by Vincent Mazenod ().