{
  "title": "On the Pattern of Currency Blocs in Africa",
  "publication": "IMF Working Papers, March 1, 2005",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/on-the-pattern-of-currency-blocs-in-africa-17958",
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  "summary": "This paper seeks to elucidate the debate over currency union in Africa. The paper examines whether empirical investigation points to the gradual emergence of currency blocs.",
  "sections": [
    {
      "heading": "Summary and purpose",
      "content": "- This paper seeks to elucidate the debate over currency union in Africa.\n- It examines whether empirical investigation points to the gradual emergence of currency blocs.\n- Based on historical data on inflation, trade, and the comovements of prices and outputs, the author argues that the emergence of large-scale currency blocs in Africa will follow a gradual path and does not lead to the emergence of a single continental currency at this time.\n- The paper addresses the issue of a possible anchor for a potential union and finds—based on the trade criterion—that the euro seems to be a good choice."
    },
    {
      "heading": "Empirical basis and methods",
      "content": "- Historical data examined include inflation, trade, and comovements of prices and outputs.\n- The analysis is empirical in nature, aiming to detect patterns consistent with bloc formation rather than normative prescriptions."
    },
    {
      "heading": "Key findings",
      "content": "- The pattern of comovements and trade suggests the emergence of three regional currency blocs:\n  - One in West Africa.\n  - A second around South Africa.\n  - A third in Central Africa.\n- Little evidence supports the emergence of a single African currency at this time.\n- The emergence of an African currency union is not necessarily precluded, since the ultimate decision to surrender a nation's monetary policy to a supranational institution is not made based solely on economic considerations.\n- Based on the trade criterion, the euro appears to be a suitable anchor should a union opt for anchorage."
    },
    {
      "heading": "Policy implications and considerations",
      "content": "- Currency union in Africa, if it emerges, is expected to follow a gradual path rather than immediate continent-wide unification.\n- Economic criteria alone may not determine decisions to join a supranational monetary arrangement; political and non-economic considerations remain important.\n- Choice of an external anchor (the euro, per the trade criterion) is a policy-relevant consideration for any prospective union.\n\n---\n\n Content in this bundle\n\n- Dynamic Currency Bloc Formation Based on the Moves of Existing Regional Groups\n  - Dynamic Currency Bloc Formation Based on the Moves of Existing Regional Groups (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Dynamic Currency Bloc Formation Based on the Moves of Existing Regional Groups (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/on-the-pattern-of-currency-blocs-in-africa-17958"
    }
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    "Authors: Etienne B Yehoue",
    "Published: March 1, 2005",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451860641.001",
    "This paper seeks to elucidate the debate over currency union in Africa.",
    "It examines whether empirical investigation points to the gradual emergence of currency blocs.",
    "Based on historical data on inflation, trade, and the comovements of prices and outputs, the author argues that the emergence of large-scale currency blocs in Africa will follow a gradual path and does not lead to the emergence of a single continental currency at this time.",
    "The paper addresses the issue of a possible anchor for a potential union and finds—based on the trade criterion—that the euro seems to be a good choice.",
    "Historical data examined include inflation, trade, and comovements of prices and outputs.",
    "The analysis is empirical in nature, aiming to detect patterns consistent with bloc formation rather than normative prescriptions.",
    "The pattern of comovements and trade suggests the emergence of three regional currency blocs:",
    "Little evidence supports the emergence of a single African currency at this time.",
    "The emergence of an African currency union is not necessarily precluded, since the ultimate decision to surrender a nation's monetary policy to a supranational institution is not made based solely on economic considerations.",
    "Based on the trade criterion, the euro appears to be a suitable anchor should a union opt for anchorage.",
    "Currency union in Africa, if it emerges, is expected to follow a gradual path rather than immediate continent-wide unification.",
    "Economic criteria alone may not determine decisions to join a supranational monetary arrangement; political and non-economic considerations remain important.",
    "Choice of an external anchor (the euro, per the trade criterion) is a policy-relevant consideration for any prospective union.",
    "**Dynamic Currency Bloc Formation Based on the Moves of Existing Regional Groups**"
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