Estimating the Effect of Common Currency on Trade in West African Monetary Zones: A Dynamic Panel-GMM Analysis

Coşkuner, Çağay; Olasehinde‐Williams, Godwin

doi:10.1007/978-3-319-66872-7_9

Cited by 2 publications

(3 citation statements)

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“…Coskuner and Olasehinde-Williams (2017) investigated the effect of common currency on the economic performance of the ECOWAS member countries with a focus on international trade patterns. They used the GMM estimation technique for a dynamic panel gravity model.…”

Section: Review Of Related Literaturementioning

confidence: 99%

“…Since the success of the ECOWAS monetary union depends on the WAMZ becoming an OCA, a lot of empirical studies have been done in an attempt to determine whether these countries have attained or are close to attaining an OCA. These include Adjalala (2020), Adu et al (2019), Agu and Nnamani (2019), Coskuner and Olasehinde-Williams (2017), Debrun et al (2002), Ibikunle et al (2022), Mati et al (2019), Mustapha and Isiaka (2019), Zouri (2020). Therefore, there is no scanty empirical literature in this area.…”

Section: Introductionmentioning

confidence: 99%

“…These include Adjalala (2020), Adu et al. (2019), Agu and Nnamani (2019), Coskuner and Olasehinde-Williams (2017), Debrun et al. (2002), Ibikunle et al.…”

Section: Introductionmentioning

confidence: 99%

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Correlations of structural shocks, dynamic responses of output and inflation to commodities price shocks and monetary union in WAMZ

Abdul Rahman,

Osei-Fosu,

Sakyi

2023

AJEMS

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PurposeThis paper examines correlations of the underlying structural shocks and the degree of synchronization in the impulse responses of output, inflation and trade to a one standard deviation shock to non-oil commodities price index and exchange rates within the West African Monetary Zone (WAMZ) countries from 1990q1 to 2020q1.Design/methodology/approachThis paper uses the structural vector autoregressive model to isolate the underlying structural shocks and compares them with the West African Monetary Union (WAEMU) countries.FindingsFindings from the study suggest that correlations of underlying structural shocks are more profound in the WAEMU than in the WAMZ. Impulse responses of output to price and exchange rate shocks are more symmetric in the WAEMU than in the WAMZ. However, impulse responses of inflation to price and exchange rate shocks are symmetric in the WAMZ than in the WAEMU and responses of trade in both sub-groups are not uniform.Practical implicationsThe paper concludes that the WAMZ does not constitute an Optimum Currency Area concerning the correlations of the structural shocks and output. However, it has achieved convergence in inflation and there are adequate adjustment mechanisms to shocks in the WAMZ than in the WAEMU. Therefore, the WAMZ may not suffer from joining the monetary union. Thus, economic Community of West African States may take steps to roll out the monetary union.Originality/valueThe paper examines correlations of the underlying structural shocks, impulse responses of output and inflation to shocks to commodities price and exchange rates in the WAMZ and compares them with the WAEMU.

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Section: Review Of Related Literaturementioning

confidence: 99%