Ecowas common currency: How prepared are its members?

Artikel

This study operationalizes the Optimum Currency Area (OCA) to investigate the preparedness of Economic Community of West African States (ECOWAS) members to form a Monetary Union (MU). Inflation and output models are estimated, with the sample 1988:01 to 2017:12 for the former and 1967 to 2016 for the latter. Analyses of ECOWAS convergence criteria, impulse responses, variance decompositions and correlations of shocks of these two models, reveal that the shocks across the ECOWAS members are asymmetric. The conclusion is that ECOWAS members as a whole are not well-prepared and therefore a full-fledged pan-ECOWAS MU is not advisable. It is also found that members of the European Monetary Union (EMU) tend to be a better fit for OCA than the ECOWAS members. The study recommends various courses of action such as fostering coordination among Central Banks of ECOWAS members, and providing a fund to serve as an incentive for countries that may incur cost rather than benefit if the single currency is created.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Investigación Económica ; ISSN: 2594-2360 ; Volume: 78 ; Year: 2019 ; Issue: 308 ; Pages: 89-119 ; Ciudad de México: Universidad Nacional Autónoma de México (UNAM), Faculdad de Economía

Classification and Topics

• Classification: Wirtschaft ; Estimation: General ; Price Level; Inflation; Deflation ; Monetary Policy ; Central Banks and Their Policies ; International Monetary Arrangements and Institutions ; International Policy Coordination and Transmission
• Subject: Optimal Currency Area ; ECOWAS ; EMU ; structural VAR ; Blanchard-Quah decomposition

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mati, Sagiru ; Civcir, çIrfan ; Ozdeser, Hüseyin
• Event: Veröffentlichung
• (who): Universidad Nacional Autónoma de México (UNAM), Faculdad de Economía
• (where): Ciudad de México
• (when): 2019

Further information

• DOI: doi:10.22201/fe.01851667p.2019.308.69625
• Handle: http://hdl.handle.net/10419/217354
• Last update: 10.03.2025, 11:43 AM CET