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N° 2003-11 |
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| August |
| On the Adequacy of Monetary Arrangements
in Sub-Saharian Africa |
Agnès Bénassy-Quéré
Maylis Coupet |
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| We examine the economic rationale for monetary
union(s) in Sub-Saharian Africa through the use of cluster analysis on a sample
of 17 countries. The variables used stem from the theory of optimum currency areas
and from the fear-of-floating literature. It is found that the existing CFA franc
zone cannot be viewed as an optimum currency area: CEMAC and UEMOA countries do
not belong to the same clusters, and a "core" of the UEMOA can be defined
on economic grounds. The results support the inclusion of the Gambia, Ghana and
Sierra Leone in an extended UEMOA arrangement, or the creation of a separate monetary
union with the "core" of the UEMOA and the Gambia, rather than the creation
of a monetary union around Nigeria. Finally, the creation of the West African
Monetary Zone (WAMZ) around Nigeria is not supported by the data. |
Abstract |
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| Monetary unions; CFA franc zone;
West African Monetary Union; ECOWAS; optimum currency areas; cluster analysis |
Keywords |
| F33 |
JEL classification |
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