Currency Union as a Panacea for ills in Africa: A New Institutional Framework and Theoretical Consideration

Stanley Abban ()

MPRA Paper from University Library of Munich, Germany

Abstract: Currency union feasibility is the major topic of discourse in most developing economies especially based on the Optimal Currency Area theory. Given this, developing countries have peculiar characteristics that favour the feasibility of forming a currency union that is not accounted for based on the OCA criteria. Also, Currency union is viewed as a panacea for curing ills in struggling economies when the appropriate institutional setting is laid out. Given this, the study showed the channels to which currency union curb ills and suggests an institutional framework to consolidate the gains from trade. The study further argues the need for a new theory to evaluate currency union feasibility hence suggest an intuition ‘Optimal Cost Phase’ as a measure for currency union feasibility which can apply to both developing and developed countries. The study concludes that there is a need for a new institutional framework to ensure transparency and the realization of the policy on a common currency.

Keywords: Currency Union; Optimal Currency Area (OCA); Optimal Cost Phase (OCP); institutions; common currency (search for similar items in EconPapers)
JEL-codes: E6 F1 F4 F45 (search for similar items in EconPapers)
Date: 2020-12-11
New Economics Papers: this item is included in nep-afr, nep-int and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/105459/1/MPRA_paper_105459.pdf original version (application/pdf)

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:pra:mprapa:105459

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().