Toward a Monetary Union in the East African Community: Asymmetric Shocks, Exchange Rates, and Risk-Sharing Mechanisms
July 20, 2015
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Summary
This paper examines how susceptible East African Community (EAC) economies are to asymmetric shocks, assesses the value of the exchange rate as a shock absorber for these countries, and reviews adjustment mechanisms that would help ensure a successful experience under a common currency. The report draws on analysis of recent experiences and examines likely future changes in the EAC economies.
Subject: Currencies, Economic integration, Economic theory, Exchange rate arrangements, Exchange rates, Foreign exchange, Monetary unions, Money, Supply shocks
Keywords: Currencies, demand shock, DP, DPPP, EAC country, EAC economy, East Africa, Exch. rate, Exchange rate arrangements, Exchange rates, interest rate, monetary union, Monetary unions, partner state, Sub-Saharan Africa, Supply shocks, West Africa
Pages:
58
Volume:
2015
DOI:
Issue:
008
Series:
Departmental Paper No. 2015/008
Stock No:
TMUEACEA
ISBN:
9781513562179
ISSN:
2616-5333
