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Currency Unions and International Integration: Evidence from the CFA and the ECCU

By David Fielding and Kalvinder K. Shields


In this paper we develop a model to identify real exchange rate and output shocks in the African CFA Franc Zone and in Dollar-pegging Caribbean countries (including members of the East Caribbean Currency Union). These two groups of countries each comprise states using several different local currencies: on the one hand the BCEAOCFA Franc and the BEAC-CFA Franc (both pegged to the Euro), on the other the ECCU Dollar and other national Dollar-pegged currencies. The purpose of the analysis is to distinguish the effect of monetary union on macroeconomic integration from the effect of pegging to a common OECD currency

Topics: Currency unions, international integration
Publisher: Dept. of Economics, University of Leicester
Year: 2001
OAI identifier: oai:lra.le.ac.uk:2381/4487

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