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Viability of a Stable West African Monetary Union

Empirical Economic Review

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ISSN 2522-2465
2415-0304
 
Authentication Code dc
 
Title Statement Viability of a Stable West African Monetary Union
 
Added Entry - Uncontrolled Name Yahya, Abdullahi Zakari
Nkwatoh, Louis Sevitenyi
Economics Department, Usmanu Danfodiyo Uninversity, Sokoto, Nigeria
Economics Department Yobe State University, Yobe, Nigeria
 
Summary, etc. There is apparently non-sychronization of business cycles in the Economic Community of West African States (ECOWAS). This may likely threaten the effectiveness of the monetary union. This study investigated the viability of a stable West African monetary union in the ECOWAS region. The study used the Ghosh-Wolf output loss function after de-trending the annual growth rates of real GDP from 1975 to 2015, using Baxter-King filter approach. The results indicate that smaller economies in the region (Cape Verde, Gambia, Sierra Leone and Mali) will compromise the stability of the union because their cost of pursuing a common stabilization policy will be very high, while larger economies (Nigeria and Ghana) will incur relatively low cost compared to the other groups. Also, the output losses of WAEMU economies fall within a particular range and are relatively lower compared to that of smaller economies in the region probably because they pursue a common stabilization policy. The implication of these findings is that the stability of the envisaged West African monetary union is likely to be compromised since smaller economies in the region will be worse-off than larger economies. Thus, in order not to compromise the stability, smaller  economies should not be admitted at the initial stage of the union until they satisfy all the criteria.
 
Publication, Distribution, Etc. Department of Economics - University of Management and Technology
 
Electronic Location and Access application/pdf
https://ojs.umt.edu.pk/index.php/eer/article/view/434
 
Data Source Entry Empirical Economic Review; Vol 3 No 1 (2020): Summer 2020
 
Language Note eng
 
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