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Periodical article | Leiden University catalogue | WorldCat |
Title: | Macroeconomic Shocks and Trade Flows within Sub-Saharan Africa: Implications for Optimum Currency Arrangements |
Authors: | Bayoumi, Tamim Ostry, Jonathan D. |
Year: | 1997 |
Periodical: | Journal of African Economies |
Volume: | 6 |
Issue: | 3 |
Period: | October |
Pages: | 412-444 |
Language: | English |
Geographic term: | Subsaharan Africa |
Subjects: | monetary areas exchange rates Economics and Trade Inter-African Relations |
External link: | https://jae.oxfordjournals.org/content/6/3/412.full.pdf |
Abstract: | Africa has more countries than any other continent, and hence the largest number of potential monetary and exchange rate arrangements. The authors investigate whether the existing highly fractured monetary arrangements in sub-Saharan Africa correspond to what might be expected from the theory of optimum currency areas by analysing both the size and correlation of real economic disturbances across countries and the level of intraregional trade. They begin with a brief review of existing exchange rate arrangements in sub-Saharan Africa, followed by a discussion of a number of structural characteristics of sub-Saharan African countries, including those relating to export diversification. The results of their analysis indicate that the main benefit from existing arrangements such as the CFA franc zone and the Common Monetary Area (CMA) may well come from the monetary stability these arrangements provide, which does not require the existence of a common currency. The results provide little evidence that sub-Saharan African countries would benefit in the near future from larger currency unions. Bibliogr., notes, ref., sum. |