Macroeconomic Shocks and Trade Flows within Sub-Saharan Africa: Implications for Optimum Currency Arrangements

December 1, 1995

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Format: Chicago

Tamim Bayoumi, and Jonathan David Ostry. Macroeconomic Shocks and Trade Flows within Sub-Saharan Africa: Implications for Optimum Currency Arrangements, (USA: International Monetary Fund, 1995) accessed December 3, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Africa has more countries than any other continent, and hence the largest number of potential monetary and exchange rate arrangements. This paper looks at whether the existing highly fractured monetary arrangements in Sub-Saharan Africa correspond to what might be expected from the theory of optimum currency areas. This is done by analyzing both the size and correlation of real disturbances across countries and the level of intra-regional trade. The results indicate little evidence that Sub-Saharan African countries would benefit in the near future from larger currency unions.

Subject: Conventional peg, Currencies, Economic integration, Exchange rate arrangements, Foreign exchange, Inflation, Monetary unions, Money, Prices

Keywords: Africa, CFA franc zone, Conventional peg, Currencies, East Asia, ECOWAS country, ECOWAS trade share, Exchange rate arrangement, Exchange rate arrangements, Group trade, Inflation, Inflation correlation, Monetary unions, Optimum Currency Areas, Share rise, Sub-Saharan Africa, Trade share, West Africa, WP

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1995/142
Stock No:

WPIEA1421995
ISBN:

9781451927498
ISSN:

1018-5941

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