Macroeconomic Shock Synchronization in the East African Community

Albert Mafusire and Zuzana Brixiová Schwidrowski

No wp1031, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: The East African Community (EAC) economic integration has gained momentum recently, with the EAC countries aiming to adopt a single currency in 2015. This paper evaluates empirically the readiness of the EAC countries for monetary union. First, structural similarity of the EAC countries is measured in terms of similarity of production and exports. Second, the symmetry of shocks among the EAC members is examined with structural VAR. Both methods point to a low shock synchronization in the EAC, suggesting that the move to EAMU would need a thorough evaluation and preparation. The paper concludes with policies that would facilitate the EAC regional economic integration, including the possible eventual establishment of a monetary union.

Keywords: shock synchronization; structural VAR; regional integration; East Africa (search for similar items in EconPapers)
JEL-codes: C53 E32 F42 (search for similar items in EconPapers)
Pages: pages
Date: 2012-03-01
New Economics Papers: this item is included in nep-afr and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Macroeconomic Shock Synchronization in the East African Community (2013)
Journal Article: Macroeconomic Shock Synchronization in the East African Community (2013)
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