BazEkon - The Main Library of the Cracow University of Economics

BazEkon home page

Main menu

Author
Bass Hans-Heinrich (Bremen University of Applied Sciences), Malovic Marko (Educons University, University of Sarajevo), Rwehumbiza Deusdedit (University of Dar-es-Salaam)
Title
A Common Currency for the East African Community? Lessons From the Introduction of the Euro
Wspólna waluta dla wspólnoty Afryki Wschodniej? Lekcje płynące z wprowadzenia euro
Source
International Business and Global Economy, 2018, nr 37, s. 215-230, bibliogr. 31 poz.
Biznes Międzynarodowy w Gospodarce Globalnej
Keyword
Integracja regionalna, Optymalny obszar walutowy, Kurs walutowy, Unia walutowa
Regional integration, Optimum Currency Areas (OCA), Exchange rates, Currency union
Note
JEL Classification: E42, F33, F36, F53
summ., streszcz.
Country
Afryka Wschodnia
East Africa
Abstract
W niniejszym artykule analizuje się ideę wprowadzenia wspólnej waluty dla Wspólnoty Wschodnioafrykańskiej, w skład której wchodzą Burundi, Kenia, Rwanda, Sudan Południowy, Tanzania i Uganda. Omawia się w nim korzyści i koszty wynikające z wprowadzenia wspólnej waluty, traktując doświadczenia z wprowadzenia euro jako punkt odniesienia przy ocenie wykonalności takiego zamierzenia w Afryce. Ponadto poprzez analizę odpowiednich wskaźników przeprowadza się ocenę gotowości gospodarek wschodnioafrykańskich do wprowadzenia wspólnej waluty. Z przeprowadzonej analizy wynika, że istnieją powody, by do idei tej podchodzić bardzo ostrożnie. Równocześnie ostrzega się, by oczekiwania dotyczące wpływu wspólnej waluty na rozwój społeczno-ekonomiczny nie były zbyt wygórowane, gdyż - jak pokazuje wprowadzenie euro - rzeczywiste efekty w obszarze wymiany handlowej i korzyści konsumenckich były mniej znaczące od oczekiwanych.(abstrakt oryginalny)

The paper analyses the feasibility of a common currency for the East African Community (EAC), which comprises Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda. The paper discusses theoretical insights on the benefits and costs of a common currency. It then uses the introduction of the common European currency, the euro, as a potential yardstick to assess the feasibility of a common currency in East Africa. The paper analyses the readiness of the EAC's economies for a common currency as measured by relevant indicators. It concludes that some caveats are in order with regard to the feasibility of a common East African currency at the present point in time. It also warns that expectations of the development impact of a common currency should not be too high, as the example of the euro shows that the real outcome in terms of trade facilitation and consumer welfare is much lower than expected.(original abstract)
Full text
Show
Bibliography
Show
  1. Asongu S., Nwachukwu J., Tchamyou V., 2016, A literature survey on proposed African monetary unions, Journal of Economic Surveys, vol. 31, issue 3.
  2. Baldwin R., Skudelny F., Taglioni D., 2005, Trade effects of the euro: Evidence from sectoral data, Economic Policy, ECB Working Paper no. 446.
  3. Bass H.H., Steinbeck H.H., 2012, The euro crisis and macroeconomic policy formation in Africa, [in:] Macroeconomic policy formation in Africa, African Development Perspectives Year- book, vol. 16.
  4. Broz T., 2005, The theory of optimum currency areas: A literature review, Privredna kretanja i ekonomska politika, no. 104.
  5. De Grauwe P., Ji Y., 2016, Flexibility versus stability, A difficult trade-off in the euro area, CEPS Working Document, no. 422, https://www.ceps.eu/system/files/WD422 De Grauwe and Ji Flexibility versus Stability_0.pdf [access: 20.08.2018].
  6. Demopoulos G.D., Yannacopoulos N.A., 1999, Conditions for optimality of a currency area, Open Economies Review, vol. 10.
  7. Edwards S., 2015, Monetary policy independence under flexible exchange rates: An illusion?, NBER Working Paper no. 20893, Cambridge, MA.
  8. Glick R., Rose A.K., 2015, Currency unions and trade: A Post-EMU mea culpa, http://www. frbsf.org/economic-research/files/wp2015-11.pdf [access: 20.08.2018].
  9. Horvath R., Komarek L., 2002, Optimum currency area theory: An approach for thinking about monetary integration, Warwick Research Paper no. 647, University of Warwick.
  10. Ingram J., 1969, Comment: The currency area problem, [in:] Monetary problems of the international economy, eds. R. Mundell, A. Swoboda, University of Chicago Press, Chicago-London.
  11. IMF, 2016, International Monetary Fund, Annual report on exchange arrangements and exchange restrictions, https://www.imf.org/en/Publications/Annual-Report-on-Exchange- Arrangements-and-Exchange-Restrictions/Issues/2017/01/25/Annual-Report-on-Ex- change-Arrangements-and-Exchange-Restrictions-2016-43741 [access: 20.08.2018].
  12. Jeune Afrique, 2015, Risques de guerre civile au Burundi, http://www.jeuneafrique.com/277563/ politique/risques-de-guerre-civile-burundi-conseil-de-securite-de-lonu-se-reunit-lundi/ [access: 20.08.2018].
  13. Jeune Afrique, 2018, Soudan du Sud: Accord entre les belligérants pour retirer leurs forces des «zones urbaines», http://www.jeuneafrique.com/589639/politique/soudan-du-sud-les- belligerants-daccord-pour-retirer-leurs-forces-des-zones-urbaines/ [access: 20.08.2018].
  14. Kenen P., 1969, The theory of optimum currency areas: An eclectic view, [in:] Monetary problems of the international economy, eds. R. Mundell, A. Swoboda, University of Chicago Press, Chicago-London.
  15. Krugman P., 1993, Lessons of Massachusetts for EMU, [in:] Adjustment and growth in the European monetary union, eds. F. Giavazzi, F. Torres, Cambridge University Press, New York.
  16. Krugman P., 2012, Revenge of the optimum currency area, The New York Times, https://krugman.blogs.nytimes.com/2012/06/24/revenge-of-the-optimum-currency-area/ [access: 20.08.2018].
  17. Macedoni L., 2018, Has the euro shrunk the band? Price convergence in a currency union, Aarhus University, http://www.lucamacedoni.com/uploads/7/2/1/9/72195123/euro_tar.pdf [access: 20.08.2018].
  18. Malovic M., Djukic M., Redzepagic S., 2011, Maastricht criteria at the age of 18: Are they even converging, which party and to what end?, [in:] Serbia and the European Union: Economic lessons from the new member states, eds. J.S. Andrade et al., University of Coimbra, Coimbra.
  19. McKinnon R., 1963, Optimum currency areas, The American Economic Review, vol. 53.
  20. Mold A., Bagiza R., 2016, Building productive capacities for regional and global competitiveness: The case of the East African Community, [in:] Africa's progress in regional and global economic integration: Towards transformative regional integration, African Development Perspectives Yearbook, vol. 18.
  21. Mongelli F.P., 2002, New views on the optimum currency area theory: What is EMU telling us?, ECB Working Paper no. 138.
  22. Mundell R., 1961, A theory of optimum currency areas, The American Economic Review, vol. 51, no. 4.
  23. Nkwame M., 2017, East Africa: EAC Eyes Single Currency By 2024, AllAfrica, https://allafrica.com/stories/201711150165.html [access: 20.08.2018].
  24. OANDA, [n.d.], https://www.oanda.com/lang/de/currency/converter/ [access: 01.06.2018].
  25. Obstfeld M., Peri G., 1998, Regional Nonadjustment and Fiscal Policy: Lessons for EMU, NBER Working Paper no. 6431, https://core.ac.uk/download/pdf/6881378.pdf [access: 20.08.2018].
  26. Peters H., 2006, Theorie optimaler Währungsräume vor dem Hintergrund der EU-Erweiterung, IÖB-Diskussionspapiere, University of Münster, Institute for Economic Education.
  27. Rose A.K., 2000, One money, one market: The effect of common currencies on trade, Economic Policy, vol. 15, no. 30.
  28. The East African, 2018, EAC vision for single currency takes shape, http://www.theeastafrican. co.ke/business/East-Africa-single-currency-takes-shape/2560-4389640-s8m4du/index. html [access: 20.08.2018].
  29. UNECA, 2012, Towards a common currency in the East African Community: Issues, challenges and prospects, Addis Ababa, https://www.uneca.org/sites/default/files/PublicationFiles/ towards_a_common_currency_in_the_eac-2012.pdf [access: 20.08.2018].
  30. UNECA, 2016, Africa regional integration index report, Addis Ababa, https://www.uneca.org/sites/default/files/PublicationFiles/arii-report2016_en_web.pdf [access: 20.08.2018].
  31. Wikimedia, [n.d.], Countries of the East African Community, https://upload.wikimedia.org/wikipedia/commons/1/16/Africa-countries-EAC.png [access: 20.08.2018].
Cited by
Show
ISSN
2300-6102
Language
eng
URI / DOI
http://dx.doi.org/10.4467/23539496IB.18.015.9388
Share on Facebook Share on Twitter Share on Google+ Share on Pinterest Share on LinkedIn Wyślij znajomemu