Monetary Union in West Africa (ECOWAS)

February 14, 2001

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Format: Chicago

Catherine A Pattillo, and Paul R Masson. Monetary Union in West Africa (ECOWAS), (USA: International Monetary Fund, 2001) accessed September 18, 2024

Summary

This chapter evaluates whether a monetary union makes economic sense and discusses the institutional requirements for a successful Monetary Union in West Africa (ECOWAS). The chapter considers how best the political momentum for a union can be channeled toward a fundamental improvement in underlying policies. The paper also reviews the economic situation of the ECOWAS members, with the objective of evaluating the ease with which they can proceed to a common currency. Regional integration resulting in greater trade among ECOWAS countries may help increase efficiency of production. Trade among developing countries, in general, is likely to have fewer efficiency benefits than trade with developed countries, however, because the possibilities of exploiting complementarities are less. The foregoing considerations suggest that the momentum in favor of monetary union should be channelled into the crucial first phase of enhanced mutual surveillance and emphasis on each country improving its macroeconomic and structural policies. Success in this endeavor would in and of itself help to increase exchange rate stability.

Subject: Currencies, Economic integration, Exchange rates, Foreign exchange, International trade, Monetary unions, Money, Real effective exchange rates, Terms of trade

Keywords: Currencies, Currency, ECOWAS convergence criteria, ECOWAS country, ECOWAS monetary union, ECOWAS monetary union project, Exchange rates, Global, Monetary unions, North America, OP, Real effective exchange rates, Sub-Saharan Africa, Terms of trade, WAEMU, WAEMU country, West Africa

Publication Details

Pages:

52
Volume:

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DOI:

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Issue:

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Series:

Occasional Paper No. 2001/003
Stock No:

S204EA0000000
ISBN:

9781589060142
ISSN:

0251-6365

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