Simplice A, Asongu (2012): A Short-run Schumpeterian Trip to Embryonic African Monetary Zones. Forthcoming in:
Download (416kB) | Preview
With the spectre of the Euro crisis looming substantially large and scaring potential monetary unions, this study is a short-run trip to embryonic African monetary zones to assess the Schumpeterian thesis for positive spillovers of financial services on growth. Causality analysis is performed with seven financial development and three growth indicators in the proposed West African Monetary Zone (WAMZ) and East African Monetary Zone (EAMZ). The journey is promising for the EAMZ and lamentable for the WAMZ. Results of the EAMZ are broadly consistent with the traditional discretionary monetary policy arrangements while those of the WAMZ are in line with the non-traditional strand of regimes in which, policy instruments in the short-run cannot be used to offset adverse shocks to output. Policy implications are discussed.
|Item Type:||MPRA Paper|
|Original Title:||A Short-run Schumpeterian Trip to Embryonic African Monetary Zones|
|Keywords:||Finance; Growth; Africa|
|Subjects:||O - Economic Development, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O10 - General
E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E50 - General
G - Financial Economics > G2 - Financial Institutions and Services > G20 - General
|Depositing User:||Simplice Anutechia Asongu|
|Date Deposited:||11. Dec 2012 10:28|
|Last Modified:||18. Feb 2013 10:32|
Agénor, P, R., McDermott, C. J., Ucer, E. M., (1997). “Fiscal Imbalances, Capital Inflows, and the Real Exchange Rate: The Case of Turkey”. IMF Working Paper 97/1.
Alagidede, P., Coleman, S., & Cuestas, J. C., (2011). “Inflationary shocks and common economic trends: Implications for West African Monetary Union membership”, Journal of Policy Modeling, Forthcoming.
Andersen, T., & Tarp, F., (2003). “Financial Liberalization, Financial Development and Economic growth in LDCs”, Journal of International Development, 15, pp. 189-209.
Asongu, S. A., (2011a). “Finance and growth: Schumpeter might be wrong in our era. New evidence from Meta-analysis”, MPRA Paper No. 32559.
Asongu, S. A., (2011b). “Why do French civil-law countries have higher levels of financial efficiency?”. Journal of Advanced Research in Law and Economics, 2(2), pp. 94-108.
Asongu, S. A., (2012a). “Are Proposed African Monetary Unions Optimal Currency Areas? Real, Monetary and Fiscal Policy Convergence Analysis”, African Journal of Economic and Management Studies: Forthcoming.
Asongu, S. A., (2012b). “REER Imbalances and Macroeconomic Adjustments in the Proposed West African Monetary Union”, African Governance and Development Institute Working Paper.
Asongu, S. A., (2012c). “African Financial Development Dynamics: Big Time Convergence”, African Journal of Economic and Management Studies: Forthcoming.
Baonza, J. D., (2011). “Finance and Growth: A Schumpeterian Trip to Africa”, Barcelona GSE.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1898932 (Accessed on: 02/11/2012).
Buigut, S. K., & Valev, N. T., (2005). “Is the Proposed East African Monetary Union an Optimal Currency Area? A Structural Vector Autoregression Analysis”, World Development, 33(12), pp. 260-267.
Celasun, O., & Justiniano, A., (2005). “Synchronization of output fluctuations in West Africa: Implications for monetary unification”, IMF Working Paper.
De Avila, D. R., (2003). “Finance and Growth in the EU: New Evidence from the Liberalization and Harmonization of the Banking Industry”, European Central Bank, Working Paper No. 266.
Debrun, X., Masson, P., & Pattillo, C., (2005). “Monetary union in West Africa: Who might gain, who might lose and why?”, Canadian Journal of Economics, 38(2), pp. 454-481.
Engle, R. F., & Granger, W. J., (1987). “Cointegration and error correction: Representation, estimation and testing”. Econometrica, 55, pp. 251-276.
Fouda, O. J. P., (2009). “The excess liquidity of banks in Franc zone: how to explain the paradox in the CEMAC”, Revue Africaine de l’Integration, 3(2), pp. 1-56.
Grossman, G. N., & Helpman, E., (1991). Innovation and Growth in the Global Economy, The MIT Press, Cambridge, Massachusetts.
Im, K. S., Pesaran, M. H., & Shin, Y., (2003). “Testing for unit roots in heterogeneous panels”. Journal of Econometrics, 115, pp. 53-74.
King, R. G., & Levine, R., (1993). “Finance and Growth: Schumpeter Might Be Right”, The Quarterly Journal of Economics, MIT Press, 108(3), pp. 717-737.
Levin, A., Lin, C. F., & Chu, C. S., (2002). “Unit root tests in panel data: asymptotic and finite-sample properties”. Journal of Econometrics, 108, pp. 1-24.
Liew, V. K., (2004). “Which lag selection criteria should we employ?”. Economics Bulletin, 3(33), pp. 1-9.
Lucas, R. E., (1988). “On the Mechanics of Economic Growth”, Journal of Monetary Economics, 22, pp. 3-42.
Maddala, G. S., & Wu, S., (1999). “A comparative study of unit root tests with panel data and a new simple test”. Oxford Bulletin of Economics and Statistics, 61, pp. 631-52.
Mkenda, B. K., (2001). “Is EA an optimum currency area?”, Working Papers in Economics, No. 41. School of Economics and Commercial Law, Goteborg University.
Pagano, M., (1993). “Financial Markets and Growth: An Overview”, European Economic Review, 37, pp. 613-622.
Romer, P. M., (1990). “Endogenous Technological Change”, Journal of Political Economy, 98(5): S71-S102.
Saxegaard, M., (2006). “Excess liquidity and effectiveness of monetary policy: evidence from sub-Saharan Africa”, IMF Working Paper 06/115.
Starr, M., (2005). “Does money matter in the CIS? Effects of monetary policy on output and prices”. Journal of Comparative Economics, 33, pp. 441-461.
Tsangarides, C. G., & Qureshi, M. S., (2008). “Monetary Union Membership in West Africa: A Cluster Analysis”, World Development, 36(7), pp. 1261-1279.
Vickers, J., (2000). “Monetary union and economic growth”, National Bank of Belgium, Working Paper Research No. 10.
Weeks, J., (2010). “Why Monetary Policy is Irrelevant in Africa South of the Sahara”, School of Oriental and African Studies, Center for Development and Policy Research, Development Viewpoint No. 53. http://www.soas.ac.uk/cdpr/publications/dv/file59766.pdf (accessed: 29/10/2012).
Willett, T. D., (2011). “Some Lessons for Economists from the Financial Crisis”. In Indian Growth and Development Review, 3(2), pp. 186-208.
Willett, T. D., & Srisorn, N., (2011, June). “Some Lessons for Asia from the Euro Crisis”, The Claremont Colleges, Workshop on Global Growth and Economic Governance Implications for Asia: George Mason University.