Should African Monetary Unions be Expanded? An Empirical Investigation of the Scope for Monetary Integration in Sub-Saharan Africa

69 Pages Posted: 19 Jul 2010

See all articles by Xavier Debrun

Xavier Debrun

International Monetary Fund (IMF) - Research Department

Catherine A. Pattillo

International Monetary Fund (IMF) - Research Division

Paul R. Masson

affiliation not provided to SSRN

Date Written: July 2010

Abstract

This paper develops a full-fledged cost-benefit analysis of monetary integration, and applies it to the currency unions actively pursued in Africa. The benefits of monetary union come from a more credible monetary policy, while the costs derive from real shock asymmetries and fiscal disparities. The model is calibrated using African data. Simulations indicate that the proposed EAC, ECOWAS, and SADC monetary unions bring about net benefits to some potential members, but modest net gains and sometimes net losses for others. Strengthening domestic macroeconomic frameworks is shown to provide some of the same improvements as monetary integration, reducing the latter’s relative attractiveness.

Suggested Citation

Debrun, Xavier and Pattillo, Catherine and Masson, Paul R., Should African Monetary Unions be Expanded? An Empirical Investigation of the Scope for Monetary Integration in Sub-Saharan Africa (July 2010). IMF Working Paper No. 10/157, Available at SSRN: https://ssrn.com/abstract=1641008

Xavier Debrun (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-8321 (Phone)
202-623-6343 (Fax)

Catherine Pattillo

International Monetary Fund (IMF) - Research Division ( email )

700 19th Street NW
Washington, DC 20431
United States

Paul R. Masson

affiliation not provided to SSRN

No Address Available

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
130
Abstract Views
648
rank
239,069
PlumX Metrics