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Title:Southern African economic integration: evidence from an augmented gravity model PDF Logo
Authors:Warin, Thierry
Wunnava, Phanindra V.
Tengia, Optat
Wandschneider, Kirsten
Issue Date:2009
Series/Report no.:IZA Discussion Papers 4316
Abstract:This paper investigates the feasibility of creating a common-currency union consisting of 16 countries in Southern Africa. We estimate an augmented-gravity model that includes public deficit, public debt, public expenditure, inflation, and the foreign reserves position. We also integrate Africa-specific variables such as existing economic blocs in the region, colonial heritage, and the convergence of living standards. Our analysis shows that the prospect for further integration in Southern Africa is promising, but many challenges still persist. The existing economic blocs can provide a first stepping stone to a larger currency union, but countries continuously have to cultivate good governance and fiscal discipline.
Subjects:Optimum currency area
gravity model
Southern African integration
endogenous optimum currency area theory
JEL:F1
F3
F4
O24
O55
Persistent Identifier of the first edition:urn:nbn:de:101:1-20090825553
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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