Abstract
There is no doubt that regional economic integration and eventual monetary union would be generally beneficial to the economies of West Africa. Each country in the sub-region conceptualizes and implements its own monetary, fiscal and exchange rate policies, among others. There have been attempts in recent years by some countries to design such policies in line with efforts to meet both primary and secondary criteria for convergence. However, these policies seem not to be properly coordinated. They remain country specific and focused thus defeating the essence of moving towards a monetary union.
This paper attempts to shows analytically that stability can be achieved through monetary union but at a cost; loss of ability to exploit monetary policy to boost output. However, effective risk-sharing mechanisms and economic policy coordination within a holistic framework would smooth the process towards a successful monetary union.
Paper presented at the 3rd Annual Conference on “Regional Integration in Africa (ACRIA 3)” held in Dakar, Senegal, July 4–5, 2012, organized by CREPOL
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- 1.
See Beetsma and Giulodori (2010) for comprehensive review of recent research on Optimum currency Area and monetary integration.
- 2.
Latin Monetary Union existed from 1865 until 1927, with Belgium, France, Italy and Switzerland as members and later joined by Bulgaria, Greece, Romania, San Marino, Serbia, Spain and Venezuela. The Scandinavian monetary union existed between 1873 and 1914 with membership comprising Denmark, Sweden and Norway (Jacimovic 2012).
- 3.
Adherence to the convergence criteria is more strictly enforced these days following the Euro zone debt crisis.
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Ekpo, A.H., Udoh, E. (2014). Policy Coordination Framework for the Proposed Monetary Union in ECOWAS. In: Seck, D. (eds) Regional Economic Integration in West Africa. Advances in African Economic, Social and Political Development. Springer, Cham. https://doi.org/10.1007/978-3-319-01282-7_3
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