A GLOBAL VAR ANALYSIS OF GLOBAL AND REGIONAL SHOCK SPILLOVERS TO WEST AFRICAN COUNTRIES

Sikiru Abdulsalam and Afees Salisu

The Singapore Economic Review (SER), 2024, vol. 69, issue 02, 543-566

Abstract: Motivated by the drive to achieve monetary union in the Economic Community of West African States (ECOWAS), the vulnerability of member countries to global and regional shocks is examined, using the global VAR (GVAR) framework so constructed for the purpose. The global shocks are those due to global commodity prices, oil and food prices, while the regional shocks capture the influence of their major trading partners; the United States (US) and China. We estimate a 59-unit GVAR model comprising advanced and emerging economies. Two findings are discernible from the results. First, the constituent countries are vulnerable to both global and regional shocks. Second, after grouping the countries into two recognized divisions [i.e., the West African Economic and Monetary Union (WAEMU) and West African Monetary Zone (WAMZ)], we find significant variations in their response to shocks. These findings have implications on the common monetary zone agenda for the region, particularly as regards to the heterogeneous response and vulnerability of the constituent countries to shocks. Resolving such vulnerabilities is a major requirement for the success of a monetary union.

Keywords: ECOWAS; GVAR; shock transmission; macro-economy; optimal currency (search for similar items in EconPapers)
JEL-codes: C33 E44 F15 O55 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0217590821410034
Access to full text is restricted to subscribers

Related works:
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:wsi:serxxx:v:69:y:2024:i:02:n:s0217590821410034

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0217590821410034

Access Statistics for this article

The Singapore Economic Review (SER) is currently edited by Euston Quah

More articles in The Singapore Economic Review (SER) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().