 Is there a stochastic convergence process in the West African economic and monetary union in presence of multiple structural breaks from 1960 to 2010?Mohamed Bah () Economics Bulletin, 2014, vol. 34, issue 3, 1917-1928 Abstract: Our study analyses stochastic convergence of relative real GDP per capita in the West African Economic and Monetary Union (WAEMU) in the period 1960 to 2010. It highlights the importance of considering structural breaks and cross-section dependence in the panel unit root tests. Using the panel stationarity test proposed by Carrion-I-Silvestre, Barrio-Castro and Lopez-Bazo (2005), we show that there was stochastic convergence in the WAEMU, by allowing for multiple level and slope shifts in the trend and for a general form of cross-sectional dependence. In other words, this result assumes that the effects of structural shocks occurring in the WAEMU zone disappeared over time and the series representing the logarithm of relative GDP per capita reverted towards their respective equilibriums. So, it encourages the objectives of WAEMU enlargement to other countries of West Africa as far as all countries could benefit from this process according to the predictions of the theory of endogeneity of optimum currency area. Keywords: Panel stationarity test; Structural breaks; Bootstrap; Monte Carlo; Stochastic convergence; Franc Zone; WAEMU (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-14-00161 Access Statistics for this article More articles in Economics Bulletin from AccessEcon |
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