Regional Integration in West Africa

Eswar Prasad; Vera Songwe

doi:10.5771/9780815738541

Regional Integration in West Africa

Is There a Role for a Single Currency?

Published 2021

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doi.org/10.5771/9780815738541
ISBN print: 978-0-8157-3853-4
ISBN online: 978-0-8157-3854-1
Rowman & Littlefield, Lanham Rowman & Littlefield, Lanham

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Abstract

Assessing the potential benefits and risks of a currency union

Leaders of the fifteen-member Economic Community of West African States (ECOWAS) have set a goal of achieving a monetary and currency union by late 2020. Although some progress has been made toward achieving this ambitious goal, major challenges remain if the region is to realize the necessary macroeconomic convergence and establish the required institutional framework in a relatively short period of time.

The proposed union offers many potential benefits, especially for countries with historically high inflation rates and weak central banks. But, as implementation of the euro over the past two decades has shown, folding multiple currencies, representing disparate economies, into a common union comes with significant costs, along with operational challenges and transitional risks. All these potential negatives must be considered carefully by ECOWAS leaders seeking tomeet a self-imposed deadline.

This book, by two leading experts on economics and Africa, makes a significant analytical contribution to the debates now under way about how ECOWAS could achieve and manage its currency union, andthe ramifications for the African continent.

Schlagworte

africa ECOWAS west africa macroeconomic convergence monetary union economic community of west african states currency union central banks

Chapter Expand | CollapsePage
Preface
- Table of Contents
- Acknowledgments
1–12 Introduction and Overview 1–12
13–26 Basic Analytical Considerations 13–26
27–40 Integration through Trade 27–40
41–68 Macroeconomic and Structural Convergence 41–68
69–82 Exchange Rate and Monetary Policy Regimes 69–82
83–106 Illustrative Monetary Policy Rules 83–106
107–114 Institutional Framework, Policy Coordination 107–114
115–120 The Path Forward 115–120
121–132 Appendix A: Comparing and Contrasting Asia's and Europe's Approaches to Economic Integration 121–132
133–136 Appendix B: Macroeconomic Convergence Criteria for Existing Monetary/Currency Unions 133–136
137–154 Appendix C: General Equilibrium Analysis of Alternative Exchange Rate and Monetary Policy Regimes 137–154
155–164 Appendix D: Details on Construction of Data for Analytical Exercises 155–164
165–174 Notes 165–174
175–182 Bibliography 175–182
Index

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