Dynamic Macroeconomic Convergence in the West Africa Monetary Zone (WAMZ)

International Business and Management, Vol. 1, No. 1, pp. 31-40, 2010

10 Pages Posted: 2 Mar 2012

See all articles by Anokye M. Adam

Anokye M. Adam

University of Cape Coast - School of Business

Daniel Akwesi Agyapong

affiliation not provided to SSRN

Emmanuel Gyamfi

affiliation not provided to SSRN

Date Written: February 19, 2012

Abstract

The paper empirically investigates the issue of macroeconomic convergence in the West Africa Monetary Zone (WAMZ) using monthly data from 1990:01 to 2010:05 as part of the ongoing discussion on the single currency for West Africa, The ECO initiative. The study specifically examines exchange and inflation rates convergence and finds no evidence of convergence in inflation in the WAMZ and little support for convergence in exchange rate. The findings imply that WAMZ is not ready for a single currency and that the decision to postpone the introduction of the Eco to 2015 is in a right direction. The possibility of introducing the ECO requires a change of macroeconomic policy direction of member countries due to evidence of divergence in inflation across the region and higher distance to convergence.

Keywords: Kalman, convergence, ECO, single currency

JEL Classification: M0, N0

Suggested Citation

Adam, Anokye M. and Agyapong, Daniel Akwesi and Gyamfi, Emmanuel, Dynamic Macroeconomic Convergence in the West Africa Monetary Zone (WAMZ) (February 19, 2012). International Business and Management, Vol. 1, No. 1, pp. 31-40, 2010, Available at SSRN: https://ssrn.com/abstract=2007994

Anokye M. Adam (Contact Author)

University of Cape Coast - School of Business ( email )

Cape coast
Ghana

Daniel Akwesi Agyapong

affiliation not provided to SSRN

Emmanuel Gyamfi

affiliation not provided to SSRN ( email )

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