Template-Type: ReDIF-Paper 1.0
Author-Name: Simeon Coleman 
Title: Investigating Business Cycle Synchronization in West Africa
Abstract: This paper contributes to the discussion on the long term sustainability of the
embryonic second monetary union in Africa, the West African Monetary Zone
(WAMZ). We analyse the level of economic and monetary integration in West Africa
by analysing the degree of growth cycle synchronisation between five candidate
countries over the past thirty years. Our empirical approach improves on the standard
Pearson Correlation between trend and cyclical components of GDP by analyzing a
measure of co-movement at higher frequencies between computed z-scores for all
possible pairings of the candidate countries. Our results indicate a lack of a consistent
pattern of synchronized growth cycles, which raises concerns about the economic
sustainability of the WAMZ, as it implies that members may face significant
stabilisation costs. Some policy implications are discussed.
File-URL: http://www.ntu.ac.uk/__data/assets/pdf_file/0008/310310/Investigating-business-cycle-synchronization-in-West-Africa.pdf
File-Format: Application/pdf
File-Function: First version, 2011
Creation-Date: 2011-04
Classification-JEL: E32, E61, F42
Keywords: Business cycles, monetary unions
Handle: RePEc:nbs:wpaper:2011/01