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Monetary Integration in the Presence of Heterogeneous Countries: how much does it cost for Maghreb Countries?


This paper tries to evaluate the likely consequences of creating a hypothetical monetary union between various Maghreb Countries2. More specifically, basing on an optimization exercise and giving the economic, financial and institutional structures in these countries, it attempt to assess the cost of implementing a common monetary policy conducted by a potential supranational central bank in terms of inflation and output variability.The results show that the implementation of a common monetary policy is not beneficial, especially for Algeria where the variability of inflation and activity is more important than in Morocco and Tunisia. Thus, the creation of a monetary union would not be useful and the heterogeneity of these economies could be costly.

Corporate Author: 
Ethipian Economics Association (EEA)
Ethipian Economics Association (EEA)
Primary Descriptors: 

Monetary policy

Secondary Descriptor: 

Africa - Economic integration

Cataloge Date: 
Broad Subject heading: 
Monetary Unions
Call Number: 
330.963 PRO 2015
Serial Key Title: 
Proceedings of the 19th Annual Conference of Africa Region Chapter of the Econometric Society
Publication catagory: 
Content type: 
Publication date: 
2015-06-01 00:00:00
Conference Place: 
EEA Conference Center
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Current frequency: 
Conference date: 
July 16 to 19, 201