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Appears in Collections:Economics Working Papers
Peer Review Status: Unrefereed
Title: Persistence of Inflationary shocks: Implications for West African Monetary Union Membership
Author(s): Alagidede, Paul
Coleman, Simeon
Cuestas, Juan Carlos
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Citation: Alagidede P, Coleman S & Cuestas JC (2010) Persistence of Inflationary shocks: Implications for West African Monetary Union Membership. Stirling Economics Discussion Paper, 2010-11.
Keywords: Inflationary shocks
fractional integration
West Africa
Monetary unions
JEL Code(s): C14
Issue Date: Oct-2010
Series/Report no.: Stirling Economics Discussion Paper, 2010-11
Abstract: Plans are far advanced to form a second monetary union, the West African Monetary Zone (WAMZ), in Africa. While much attention is being placed on convergence criteria and preparedness of the five aspiring member states, less attention is being placed on how the dynamics of inflation in individual countries are (dis)similar. This paper aims to stimulate debate on the long term sustainability of the union by examining the dynamics of inflation within these countries. Using Fractional Integration (FI) methods, we establish that some significant differences exist among the countries. Shocks to inflation in Sierra Leone are non mean reverting; results for The Gambia, Ghana and Guinea-Bissau suggest some inflation persistence, despite being mean reverting. Some policy implications are discussed and possible outstanding policy questions are raised.
Type: Working or Discussion Paper
Affiliation: Economics
Nottingham Trent University
University of Sheffield

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