Welfare Effects of Monetary Integration: The Common Monetary Area and Beyond

34 Pages Posted: 9 Aug 2012

See all articles by Tamon Asonuma

Tamon Asonuma

affiliation not provided to SSRN

Xavier Debrun

International Monetary Fund (IMF) - Research Department

Paul R. Masson

C.D. Howe Institute

Date Written: May 2012

Abstract

This paper proposes a quantitative assessment of the welfare effects arising from the Common Monetary Area (CMA) and an array of broader grouping among Southern African Development Community (SADC) countries. Model simulations suggest that (i) participating in the CMA benefits all members; (ii) joining the CMA individually is beneficial for all SADC members except Angola, Mauritius and Tanzania; (iii) creating a symmetric CMA-wide monetary union with a regional central bank carries some costs in terms of foregone anti-inflationary credibility; and (iv) SADC-wide symmetric monetary union continues to be beneficial for all except Mauritius, although the gains for existing CMA members are likely to be limited.

Keywords: Common Monetary Area, Monetary Union, Sadc Countries, Economic Indicators, Southern African Development Community, Welfare

JEL Classification: E58, E61, F33

Suggested Citation

Asonuma, Tamon and Debrun, Xavier and Masson, Paul R., Welfare Effects of Monetary Integration: The Common Monetary Area and Beyond (May 2012). IMF Working Paper No. 12/136, Available at SSRN: https://ssrn.com/abstract=2127030

Tamon Asonuma (Contact Author)

affiliation not provided to SSRN ( email )

Xavier Debrun

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

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

Paul R. Masson

C.D. Howe Institute

67 Yonge St., Suite 300
Toronto, Ontario M5E 1J8
Canada

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