Banik, Nilanjan and Yoonus, C.A. (2011): Does ECOWAS make sense?
Download (323kB) | Preview
This paper investigates empirically the possibility of forming an Optimum Currency Area (OCA) among member countries of Economic Community of West African States (ECOWAS) region. Under OCA, member countries share a common currency (like, the Euro), while foregoing their autonomy with respect to their use of monetary policy instruments. We say that the countries are good candidates for forming an OCA if there is a long run relationship in the trend (permanent) component of output. Our results indicate existence of long run relationship in the trend component of GDP among the member countries in the ECOWAS region. Hence is the plausibility for forming an OCA.
|Item Type:||MPRA Paper|
|Original Title:||Does ECOWAS make sense?|
|Keywords:||Monetary Union, ECOWAS, Beveridge-Nelson Decomposition|
|Subjects:||F - International Economics > F1 - Trade > F15 - Economic Integration|
|Depositing User:||Nilanjan Banik|
|Date Deposited:||08. May 2012 12:40|
|Last Modified:||14. Feb 2013 17:25|
1. African Union Commission, (2008): KeyStats – Key Statistics on African Integration, Addis Ababa.
2. Beveridge, S. and C. R. Nelson, (1981): “A New Approach to Decomposition of Economic Time Series into Permanent and Transitory Components with Particular Attention Towards Measurement of Business Cycles” Journal of Monetary Economics, Volume 7, 151-174.
3. Blanchard, O. and D. Quah, (1989): “The dynamic effects of aggregate demand and supply disturbances” American Economic Review, Volume 79, 655−673.
4. Central Intelligence Agency (CIA), The World Fact Book, Available at: <https://www.cia.gov/library/publications/the-world-factbook/>, accessed on 14 March 2009. ECOWAS Handbook of International Trade (2008): Available at: <https:// www.ecostat.org />, accessed on 14 March 2009.
5. Feenstra, R. C. (1998): “Integration of Trade and Disintegration of Production in the Global Economy” Journal of Economic Perspectives, Volume 12, 31–50.
6. Goldberg, K., and N., Pavcnik (2004): “Trade, Inequality and Poverty: What Do We Know? Evidence from Recent Trade Liberalization Episodes in Developing Countries”, NBER Working Paper No. 10593.
7. Johansen, S., and K., Juselius, (1995): “Identification of the Long-Run and the Short-Run Structure: An Application to the ISLM model,” Journal of Econometrics, Volume 63, 7-36.
8. Lumsdaine, R. L. and E. S. Prasad, (2002): “Identifying the common component of international economic fluctuations: A new approach” IZA Discussion Paper No. 487, (IZA, Bonn).
9. MacKinon, J., G., (1996): “Numerical Distribution Functions for Unit Roots and Cointegration Test,” Journal of Applied Econometrics, Volume 11, 601-608.
10. World Bank, (2008): World Development Indicators, Available at: <http://devdata.worldbank.org/dataonline/>, accessed on 14 March 2009.