Welfare Effects of Monetary Integration: The Common Monetary Area and Beyond
IMF Working Papers, May 1, 2012
Source details
- Canonical URL
- Welfare Effects of Monetary Integration: The Common Monetary Area and Beyond
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Bibliographic details
- Authors: Tamon Asonuma, Xavier Debrun, Paul R Masson
- Published: May 1, 2012
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475503890.001
Summary of objective and method
- Proposes a quantitative assessment of the welfare effects arising from the Common Monetary Area (CMA) and an array of broader groupings among Southern African Development Community (SADC) countries.
- Uses model simulations to evaluate welfare implications for different membership and union configurations.
Main findings (from model simulations)
- Participating in the CMA benefits all members.
- Joining the CMA individually is beneficial for all SADC members except Angola, Mauritius and Tanzania.
- Creating a symmetric CMA-wide monetary union with a regional central bank carries some costs in terms of foregone anti-inflationary credibility.
- 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.
Subject areas and keywords
- Subject: Banking, Currencies, Inflation, Monetary base, Monetary unions
- Keywords: CMA agreement, CMA arrangement, CMA country, CMA member, CMA monetary policy, monetary union, terms of trade, WP