The proposed eco: should West Africa proceed with a common currency?

Chuku Chuku

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the rationality of proceeding with a common currency in West Africa by testing for symmetry and speed of adjustment to four underlying structural shocks among a pair of 66 ECOWAS economies. The findings reveal that there is relatively high degree of symmetry in the responses of the economies to external disturbances, while about 85 percent of the correlations in supply, demand and monetary shocks among the countries are asymmetric. The size of the shocks and speed of adjustment among countries are also dissimilar, suggesting that ECOWAS should not yet proceed with the eco, since the costs will outweigh the benefits.

Keywords: Monetary union; Structural VAR; Optimal currency area; ECOWAS; West Africa (search for similar items in EconPapers)
JEL-codes: E52 F36 F42 (search for similar items in EconPapers)
Date: 2012-03-07
New Economics Papers: this item is included in nep-afr and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:43739

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