THE ENDOGENEITY OF BUSINESS CYCLE SYNCHRONISATION IN SOUTHERN AFRICAN DEVELOPMENT COMMUNITY

Ntokozo Nzimande and Harold Ngalawa
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Harold Ngalawa: School of Accounting, Economics & Finance, University of KwaZulu-Natal, Private Bag X54001, Durban, South Africa

Global Economy Journal (GEJ), 2019, vol. 19, issue 02, 1-12

Abstract: This paper investigates the endogeneity hypothesis of optimal currency area (OCA) criterion, that is, business cycles synchronisation, in a panel of Southern African Development Community (SADC) member countries, for the period 1994–2016. Using a Generalised Method of Moments (GMM), the study finds that, amongst other factors, trade induces business cycles comovement. This finding lends support to the endogeneity hypothesis of OCA theory.

Keywords: Business cycles; synchronisation; trade integration; financial integration; monetary union (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1142/S2194565919500106

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