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On the feasibility of a monetary union in the Southern Africa Development Community
Author(s) -
Agbeyegbe Terence D.
Publication year - 2008
Publication title -
international journal of finance and economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 39
eISSN - 1099-1158
pISSN - 1076-9307
DOI - 10.1002/ijfe.323
Subject(s) - economics , convergence (economics) , inflation (cosmology) , exchange rate , international economics , monetary economics , european monetary union , macroeconomics , monetary policy , econometrics , physics , theoretical physics
Abstract This paper investigates the feasibility of a monetary union in Southern Africa Development Community (SADC) by looking at evidence of nominal exchange rate and inflation convergence. Using a methodology based on estimating time‐varying parameters, the evidence suggests non‐convergence. The non‐convergence of nominal exchange rate and consumer price inflation suggests that presently the chances of SADC member countries satisfying some form of Maastricht‐type criteria is quite low. Copyright © 2007 John Wiley & Sons, Ltd.