Welfare Effects of Monetary Integration: the Common Monetary Area and Beyond

 
Author/Editor: Asonuma, Tamon ; Debrun, Xavier ; Masson, Paul R.
 
Publication Date: May 01, 2012
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: This paper proposes a quantitative assessment of the welfare effects arising from the Common Monetary Area (CMA) and an array of broader grouping among Southern African Development Community (SADC) countries. Model simulations suggest that (i) participating in the CMA benefits all members; (ii) joining the CMA individually is beneficial for all SADC members except Angola, Mauritius and Tanzania; (iii) creating a symmetric CMA-wide monetary union with a regional central bank carries some costs in terms of foregone anti-inflationary credibility; and (iv) SADC-wide symmetric monetary union continues to be beneficial for all except Mauritius, although the gains for existing CMA members are likely to be limited.
 
Series: Working Paper No. 12/136
Subject(s): Central banks | Cross country analysis | Economic indicators | Monetary unions | Southern African Development Community | Welfare

Author's Keyword(s): Common Monetary Area | Monetary Union | SADC countries
 
English
Publication Date: May 01, 2012
Format: Paper
Stock No: WPIEA2012136 Pages: 32
Price:
US$18.00 (Academic Rate:
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