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Exchange Rate Behaviour: Implication for West African Monetary Zone

Author

Listed:
  • Daniel Agyapong

    (University of Cape Coast)

  • Anokye M. Adam

    (University of Cape Coast)

Abstract

As West African Monetary Zone (WAMZ), in Africa is working hard to achieve convergence criteria as a sign of readiness of the five aspiring member states. The issue of similarity of behaviour of macroeconomic indicators has become very important. This paper examines the long term sustainability of the union by examining the dynamics of exchange rates behaviour of the candidate countries within zone using Fractional Integration (FI) methods. Policy implications are discussed and possible outstanding policy questions are also raised.

Suggested Citation

  • Daniel Agyapong & Anokye M. Adam, 2012. "Exchange Rate Behaviour: Implication for West African Monetary Zone," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 2(4), pages 215-228, October.
    • Handle: RePEc:hur:ijaraf:v:2:y:2012:i:4:p:215-228
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    References listed on IDEAS

    as
    1. Cuestas, Juan C. & Gil-Alana, Luís A., 2009. "Further evidence on the PPP analysis of the Australian dollar: Non-linearities, fractional integration and structural changes," Economic Modelling, Elsevier, vol. 26(6), pages 1184-1192, November.
    2. repec:bla:scandj:v:78:y:1976:i:2:p:200-224 is not listed on IDEAS
    3. Giovannini, Alberto, 1988. "Exchange rates and traded goods prices," Journal of International Economics, Elsevier, vol. 24(1-2), pages 45-68, February.
    4. Alagidede, Paul & Coleman, Simeon & Cuestas, Juan Carlos, 2010. "Persistence of Inflationary shocks: Implications for West African Monetary Union Membership," Stirling Economics Discussion Papers 2010-11, University of Stirling, Division of Economics.
    5. Assandé Désiré Adom & A.K.M. Mahbub Morshed & Subhash C. Sharma, 2012. "Sources of Real Exchange Rate Volatility in Africa: The Case of ECOWAS," African Development Review, African Development Bank, vol. 24(1), pages 79-92, March.
    6. Obstfeld, Maurice, 1986. "Rational and Self-fulfilling Balance-of-Payments Crises," American Economic Review, American Economic Association, vol. 76(1), pages 72-81, March.
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    8. Taylor, Mark P & Peel, David A & Sarno, Lucio, 2001. "Nonlinear Mean-Reversion in Real Exchange Rates: Toward a Solution to the Purchasing Power Parity Puzzles," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 1015-1042, November.
    9. Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992. "Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 159-178.
    10. Ms. Catherine A Pattillo & Mr. Paul R Masson, 2001. "Monetary Union in West Africa (ECOWAS)," IMF Occasional Papers 2001/003, International Monetary Fund.
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    Citations

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    Cited by:

    1. Daniel Agyapong, 2014. "Stock Market Integration in West African Monetary Zone: A Linear and Nonlinear Cointegration Approach," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(5), pages 563-587, May.
    2. Oladunjoye Opeyemi Nathaniel, 2019. "Validity of Purchasing Power Parity (PPP) Hypothesis in the Ecowas (1980–2017)," Emerging Economy Studies, International Management Institute, vol. 5(2), pages 141-156, November.
    3. Peterson Owusu Junior & Anokye M. Adam & George Tweneboah, 2017. "Co-movement of real exchange rates in the West African Monetary Zone," Cogent Economics & Finance, Taylor & Francis Journals, vol. 5(1), pages 1351807-135, January.

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    More about this item

    Keywords

    Exchange Rates behaviour; WAMZ; Stationarity; Fractional Integration;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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