Skip to main content

Can Inflation in WAMZ Converge without Monetary Policy Coordination?

  • Chapter

Abstract

A precondition for the introduction of a common currency (the Eco) to the West African Monetary Zone (WAMZ) is sustained low inflation in its member countries of Gambia, Ghana, Guinea, Nigeria, and Sierra Leone. It is generally expected that these countries will pursue ex ante independent monetary policies capable of narrowing inflation differentials and fostering convergence around a single digit.

Keywords

  • exchange rate
  • inflation differentials
  • panel data
  • price convergence
  • WAMZ members

This is a preview of subscription content, access via your institution.

Buying options

Chapter
USD   29.95
Price excludes VAT (USA)
  • DOI: 10.1057/9781137462084_2
  • Chapter length: 20 pages
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
eBook
USD   109.00
Price excludes VAT (USA)
  • ISBN: 978-1-137-46208-4
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
Hardcover Book
USD   149.99
Price excludes VAT (USA)

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Adamgbe, E. T. and C. C. Agu (2012). Monetary Policy Preferences in the West African Monetary Zone: Evidence from Dynamic General Equilibrium Models, Working Paper, Proceedings of the 18th International Business Research Conference, October 1st. Available at: http://ssrn.com/abstract=2200319.

    Google Scholar 

  • Altissimo, F., P. Benigno and D. Palenzuela (2005). “Long-run Determinants of Inflation Differentials in a Monetary Union”, CEPR Discussion Chapters, No. 5149.

    CrossRef  Google Scholar 

  • Angeloni, I. and M. Ehrmann (2007). “Euro Area Inflation Differentials”, Topics in Macroeconomics, Vol. 7, No. 1, Article 24.

    Google Scholar 

  • Ary Tanimoune, N., J. Combes and R. Tapsoba (2007). “Policy Mix Coherence: What Does it Mean for Monetary Policy in West Africa?”, Etudes et Documents, CERDI, No. E 2012.13. Available at: http://www.cerdi.org/ed.

  • Balogun, E. D. (2007). “Monetary Policy and Economic Performance of West African Monetary Zone Countries”, West African Journal of Monetary and Economic Integration, Vol. 8, No. 1, pp. 33–59.

    Google Scholar 

  • Égert, B., D. Ritzberger-Grunwald and M. A. Silgoner (2003). “Inflation Differentials in Europe: Past Experience and Future Prospects”, Focus on Transition, Vol. 2, pp. 47–72.

    Google Scholar 

  • Hofmann, B. and H. Remsperger (2005). “Inflation Differentials among the Euro Area Countries: Potential Causes and Consequences”, Journal of Asian Economics, Vol. 16, No. 3, pp. 403–419.

    CrossRef  Google Scholar 

  • Honohan, P. and P. Lane (2003). “Divergent Inflation Rates in EMU”, Economic Policy, pp. 358–394.

    Google Scholar 

  • Horváth, R. and K. Koprnická (2008). “Inflation Differentials in EU New Member States: An Empirical Evidence”, Working Paper 24/2008, The Institute for European Studies. Available at: http://ies.fsv.cuni.cz.

    Google Scholar 

  • International Monetary Fund (2008). Exchange Arrangements and Exchange Restrictions: Annual Report. Available at: http://www-int.imf.org/depts/mae/maeweb/databases/AREAER/index.htm.

    Google Scholar 

  • International Monetary Fund (2013). International Financial Statistics data browser.

    Google Scholar 

  • Kenen, P. (2000). Policy Domains, and the Institutionalization of Fixed Exchange Rates, Discussion Paper No. 0467, Centre for Economic Performance, London School of Economics.

    Google Scholar 

  • Kenen, P. (1969). “The Theory of Optimum Currency Areas: An Eclectic View” in R. Mundell and A. Swoboda (eds), Monetary Problems of the International Economy, Chicago, The University of Chicago Press, 1969, pp. 41–60.

    Google Scholar 

  • Lane, P. R. (2000). “Asymetric Shocks and Monetary Policy in the Currency Union”, Scandinavian Journal of Economics, Vol. 102, pp. 585–604.

    CrossRef  Google Scholar 

  • Lucas, R. E. (1976). “Econometric Policy Evaluation: A Critique”, Journal of Monetary Economics, Vol. 1, No. 2, pp. 19–46.

    Google Scholar 

  • Mara, P. and V. P. André (2011). “Eurozone Inflation Differentials and the ECB”, Working Chapter. Available at: www.ua.ac.be/tew.

    Google Scholar 

  • Mundell, R. B (1968). “The Theory of Optimum Currency Areas”, American Economic Review, Vol. 51, No. 4, pp. 657–663.

    Google Scholar 

  • Nnanna, O. J. (2007). “Eco Currency: Is a Third Postponement Avoidable?”, West African Journal of Monetary and Economic Integration, Vol. 7, No. 1, pp. 1–14.

    Google Scholar 

  • Ojo, M. O. (2005). “Towards a Common Currency in West Africa: Progress, Lessons and Prospects”, West African Journal of Monetary and Economic Integration, Vol. 5, No. 2, pp. 47–79.

    Google Scholar 

  • Popkova, E. G., J. O. Egbe, S. E. Akopov and S. N. Popovsky (2012). “The Integration of Economic Monetary Policy Systems of West African States Positive or Negative Implications”, Business & Entrepreneurship Journal, Vol. 1, No. 1, pp. 1–12.

    Google Scholar 

  • Rose, A. (2000). “One Money, One Market: Estimating the Effect of Common Currency on Trade”, Economic Policy, Vol. 30, pp. 7–45.

    Google Scholar 

  • Taylor, J. A. (2013). “Is West Africa Ready for a Common Currency: A study of WAMZ and the Eco”, UCLA Undergraduate Journal of Economics, pp. 1–50.

    Google Scholar 

  • West African Monetary Institute (2007). Is The Fiscal Criterion Achievable In The WAMZ?, Working Paper, West African Monetary Institute.

    Google Scholar 

  • West African Monetary Institute (2013). “Macroeconomic Convergence Reports”, West African Monetary Institute.

    Google Scholar 

Download references

Authors

Editor information

Editors and Affiliations

Copyright information

© 2015 Emmanuel Dele Balogun

About this chapter

Cite this chapter

Balogun, E.D. (2015). Can Inflation in WAMZ Converge without Monetary Policy Coordination?. In: Elhiraika, A.B., Mukungu, A.C.K., Nyoike, W. (eds) Regional Integration and Policy Challenges in Africa. Palgrave Macmillan, London. https://doi.org/10.1057/9781137462084_2

Download citation