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Thursday, July 30, 2020 | History

2 edition of Price and monetary convergence in currency unions found in the catalog.

Price and monetary convergence in currency unions

Patrick Honohan

Price and monetary convergence in currency unions

the franc and rand zones

by Patrick Honohan

  • 373 Want to read
  • 34 Currently reading

Published by Financial Policy and Systems Division, Country Economics Dept., World Bank in Washington, DC (1818 H St. NW, Washington 20433) .
Written in English

    Places:
  • French franc area.,
  • Rand area.,
  • Africa.,
  • Africa
    • Subjects:
    • Monetary unions -- Africa.,
    • Inflation (Finance) -- Africa -- Econometric models.,
    • Interest rates -- Africa -- Econometric models.,
    • French franc area.,
    • Rand area.

    • Edition Notes

      Cover title.

      StatementPatrick Honohan.
      SeriesPolicy, research, and external affairs working papers ;, WPS 390
      Classifications
      LC ClassificationsHG3897.4 .H66 1990
      The Physical Object
      Pagination18 p. :
      Number of Pages18
      ID Numbers
      Open LibraryOL1946279M
      LC Control Number90169720

        A currency union comprising the 15 members of the Economic Community of West African States will be no different – but that doesn't mean it can't work. YAOUNDÉ – The 15 countries of the Economic Community of West African States have agreed to adopt, as of next year, a new shared currency, the “ECO.”. History. The idea of an economic and monetary union in Europe was first raised well before establishing the European example, the Latin Monetary Union existed from – In the League of Nations, Gustav Stresemann asked in for a European currency against the background of an increased economic division due to a number of new nation states in Europe after World War I.

      Note: Every customs and monetary union and economic and monetary union also has a currency union. Zimbabwe is theoretically in a currency union with four blocs as the South African rand, Botswana pula, British pound and US dollar freely circulate, the US Dollar was until official tender. Additionally the autonomous and dependent territories, such as some of the EU member state special. Downloadable! This paper aims to study the optimality of a monetary union in West Africa by using a new methodology based on the analysis of convergence and co-movements between exchange rate misalignments. Two main advantages characterize this original framework. First, it brings together the information related to several optimum currency area criteria— such as price convergence, terms of.

      Are proposed African monetary unions optimal currency areas? Real, monetary and fiscal policy convergence analysis Article (PDF Available) in African Journal .   Adverse asymmetric shocks within a monetary union pose a serious problem to jobs and production if prices and wages are rigid and capital and labour are immobile. For a small open economy like Rwanda, the most important price is the value of the Rwandan franc. Even though prices and wages are flexible in Rwanda, the [ ].


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Price and monetary convergence in currency unions by Patrick Honohan Download PDF EPUB FB2

Price and monetary convergence in currency unions: the Franc and Rand zones (English) Abstract. Theory suggests that a currency union will impose significant macroeconomic disciplines on its members.

This paper examines the two main surviving currency zones - the franc and rand zones in Africa - to learn whether and to what extent certain generally Cited by:   This gives: 0 log Pci= ac' + y0 log PP. - GAP - 1 + X, Price and monetary convergence in currency unions where GAP = (log P6 - log P frp), The interpretation of this equation is that a surge in core inflation leads to an early response in periphery inflation (the coefficient 7); to the extent that the change in the price level at the core does not immediately pass through to the Cited by: Downloadable.

Theory suggests that a currency union will impose significant macroeconomic disciplines on its members. This paper examines the two main surviving currency zones - the franc and rand zones in Africa - to learn whether and to what extent certain generally accepted theory is confirmed by the data.

As with most fixed exchange rate systems, the African currency Price and monetary convergence in currency unions book have a dominant. Honohan, Patrick, "Price and monetary convergence in currency unions: The franc and rand zones," Journal of International Money and Finance, Elsevier, vol.

11(4. Price Convergence and The GCC Monetary Union. at times of wide spreads and when the order book is thin. (IPs), local currency prices (LCPs) and producer currency prices (PCPs) for PRICE AND MONETARY CONVERGENCE IN CURRENCY UNIONS: THE FRANC AND RAND ZONES Introduction.

Why should a country choose to sacrifice monetary independence by joining a currency union. One obvious reason is to achieve exchange rate, price and monetary stability, as membership of an union provides an otherwise. Evidence of further price convergence since is scant. Second, in the original 11 members of Europe's Economic and Monetary Union (EMU), traded goods price dispersion is now quite close to that of the USA; statistically, any differences in dispersion measures are insignificant.

The analysis of monetary integration from both perspectives leads to a straight forward conclusion: the higher the divergence in output between the currency union and the acceding country before joining the common currency, the higher the risk of price bubbles after accession as both described mechanisms turn larger GDP distance into larger.

rather than price convergence. I find no evidence of a Balassa-Samuelson effect on European inflation. Throughout the paper I provide evidence on a question that has provoked much debate in the currency union and trade literature: is there anything special about monetary union per se.

(Rose,Persson,Tenreyro, ). A currency union (also known as monetary union) is an intergovernmental agreement that involves two or more states sharing the same states may not necessarily have any further integration (such as an economic and monetary union, which would have, in addition, a customs union and a single market).

There are three types of currency unions. Download PDF: Sorry, we are unable to provide the full text but you may find it at the following location(s): (external link). "Price Level Convergence and Inflation in Europe," Working Paper Series WP, Peterson Institute for International Economics.

David C. Parsley & Shang-Jin Wei, "Convergence to the Law of One Price Without Trade Barriers or Currency Fluctuations," The Quarterly Journal of Economics, Oxford University Press, vol. (4), pages This paper notes that currency unions may be created with less than strong macroeconomic convergence between member countries.

The concept of convergence in currency unions is driven by conclusions of the Theory of Optimum Currency Areas (OCA) 2. that economies that. Statistics Department, International Monetary Fund.

Request PDF | Convergence and the Short-Run Dynamics of Prices in a Currency Union | This paper investigates the formation of prices for members of a currency union in west and central Africa, the.

Real and monetary convergence between the European monetary policy to outcomes caused by financial sector reform and by factors peculiar to transition economies such as price convergence to the EU and F. Giavazzi (Eds.), Growth and Adjustment in the European Monetary Union, Cambridge University Press, Oxford (), pp.

Inflation convergence and currency unions: The case of the East African community Article (PDF Available) in Indian Growth and Development Review 3(April) April with 95 Reads. Cristina Terra, in Principles of International Finance and Open Economy Macroeconomics, Monetary Union and Trade.

A strong argument for the creation of a monetary union is related to international trade. Sharing the same currency reduces the cost of trade between members of a monetary union, given that the transactions are made in the same currency. : Monetary and Currency Unions: The European Monetary Union and the East African Community (): Mugera, Harriet: Books.

The book follows the process from preparation to execution of the concept of European monetary union and a common currency. It helps to understand the European monetary crisis in depth, by tracing behind-the-scenes negotiations.

The importance of economic convergence for viable monetary union. Introduction. On Apin Accra, Ghana, the leaders of six West African countries 1 declared their intention to proceed to monetary union among the non-CFA 2 franc countries of the region by Januaryas a first step toward a wider monetary union including all the ECOWAS 3 countries in The six countries committed themselves to reducing central bank financing of budget.

This text analyses the benefits and costs of currency unions, focusing on the West African Monetary Zone (WAMZ). Openness, co-movement, and labor mobility are explored for each country using econometric techniques to determine the optimum currency area (OCA) : Tamsir Cham, PhD.

International Finance Discussion Papers: Monetary Union, Price Level Convergence, and Inflation: How Close is Europe to the United States [Rogers, John H., United States Federal Reserve Board] on *FREE* shipping on qualifying offers.

International Finance Discussion Papers: Monetary Union, Price Level Convergence, and Inflation: How Close is Europe to the United States.There have been other currency unions of course. There was a Latin Monetary Union in the s which had a standard coinage as between Belgium, France, Italy and Switzerland, but that was not an economic and monetary union; a standard coinage is not a monetary union.

There was no central bank controlling interest rates and exchange rates.