Business Cycle Synchronisation and Regional Migration: Testing the OCA Criteria in the West African Region

Sodiq Olaiwola Jimoh () and Soo Y. Chua
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Sodiq Olaiwola Jimoh: Universiti Sains Malaysia
Soo Y. Chua: Universiti Sains Malaysia

The Indian Journal of Labour Economics, 2024, vol. 67, issue 1, No 5, 97-108

Abstract: Abstract The West African region is on the verge of forming a monetary union. Many studies have examined the feasibility of monetary unions using criteria such as trade and financial integrations. However, labour migration which is one of the criteria has been neglected in previous studies. This study filled the gap by using Abel and Cohen's (Bilateral international migration flow estimates for 200 countries 6(1):1–13, 2019) data between 1996–2019 to examine the impact of migration flows on business cycle synchronisation using the IV-2SLS technique in the West African region. The study reveals that migration flow, specialisation of industry, and financial integrations spur business cycle synchronisation, while regional trade integration does not significantly impact business cycle synchronisation. However, the interactive terms of trade integrations and migration flow positively influenced business cycle synchronisation in the region. These findings suggest a likelihood of optimum currency area in the West African region.

Keywords: Business cycle synchronisation; Currency union; Labour migration flows; West Africa; IV-2SLS (search for similar items in EconPapers)
JEL-codes: F15 F22 F41 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s41027-024-00480-x

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