A Literature Survey on Proposed African Monetary Unions

Journal of Economic Surveys, 31(3), pp. 878–902 (June, 2017)

27 Pages Posted: 4 Oct 2015 Last revised: 13 Jun 2017

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Jacinta Nwachukwu

University of Huddersfield - Business School

Vanessa S. Tchamyou

African Governance and Development Institute

Multiple version iconThere are 2 versions of this paper

Date Written: October 2, 2015

Abstract

This study provides a survey of recent advances in the literature on proposed African monetary unions. The survey comprises about 60 empirical papers published during the past fifteen years. Four main strands are discussed individually and collectively, notably, the proposed: West African Monetary Zone (WAMZ), East African Monetary Union (EAMU), Southern African Monetary Union (SAMU) and African Monetary Union (AMU). We observe a number of issues with establishing the feasibility and/or desirability of potential monetary unions, inter alia, variations in: choice of variables, empirical strategies, sampled countries and considered periodicities. We address this ambiguity by reviewing studies with scenarios that are consistent with Hegelian dialectics and establish selective expansion as the predominant mode of monetary integration. Some proponents make cases for strong pegs and institutions as viable alternatives to currency unions. Using cluster analysis, disaggregating panels into sub-samples and distinguishing shocks from responses in the examination of business cycle synchronisation provide more subtle policy implications. We caution that for inquiries using the same theoretical underpinnings, variables and methods just by modifying the scope/context and periodicity may only contribute to increasing the number of conflicting findings. Authors should place more emphasis on new perspectives and approaches based on caveats of, and lessons from the European Monetary Union (EMU) and CFA zones.

Keywords: Currency Area; Policy Coordination; Africa

JEL Classification: F15; F36; F42; O55; P52

Suggested Citation

Asongu, Simplice and Nwachukwu, Jacinta C. and S. Tchamyou, Vanessa, A Literature Survey on Proposed African Monetary Unions (October 2, 2015). Journal of Economic Surveys, 31(3), pp. 878–902 (June, 2017). Available at SSRN: https://ssrn.com/abstract=2668585 or http://dx.doi.org/10.2139/ssrn.2668585

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

Jacinta C. Nwachukwu

University of Huddersfield - Business School ( email )

Queensgate
Huddersfield HD1 3DH
United Kingdom

Vanessa S. Tchamyou

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

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