A Short-Run Schumpeterian Trip to Embryonic African Monetary Zones

Economics Bulletin, 33(1), pp. 859-873 (2013).

20 Pages Posted: 10 Sep 2014 Last revised: 1 Apr 2015

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Date Written: December 8, 2012

Abstract

With the spectre of the Euro crisis looming substantially large and scaring potential monetary unions, this study is a short-run trip to embryonic African monetary zones to assess the Schumpeterian thesis for positive spillovers of financial services on growth. Causality analysis is performed with seven financial development and three growth indicators in the proposed West African Monetary Zone (WAMZ) and East African Monetary Zone (EAMZ). The journey is promising for the EAMZ and lamentable for the WAMZ. Results of the EAMZ are broadly consistent with the traditional discretionary monetary policy arrangements while those of the WAMZ are in line with the non-traditional strand of regimes in which, policy instruments in the short-run cannot be used to offset adverse shocks to output. Policy implications are discussed.

Keywords: Finance; Growth; Africa

JEL Classification: E50; G20; O10; O55

Suggested Citation

Asongu, Simplice, A Short-Run Schumpeterian Trip to Embryonic African Monetary Zones (December 8, 2012). Economics Bulletin, 33(1), pp. 859-873 (2013). . Available at SSRN: https://ssrn.com/abstract=2493163 or http://dx.doi.org/10.2139/ssrn.2493163

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

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