Economic and Monetary Integration in
ECOWAS Countries: A Panel VAR Approach
to Identify Macroeconomic Shocks

NDONGO, Asta; DIOP, Ibrahima Thione

Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks

Asta NDONGO, (Center for Applied Economic Research, Cheikh Anta DIOP University, Senegal)

Ibrahima Thione DİOP (Faculty of Economics and Management of the Cheikh Anta Diop University, Senegal)

World Journal of Applied Economics

2 1

Yıl: 2021 Cilt: 7 Sayı: 2 Sayfa Aralığı: 61 - 87 Metin Dili: İngilizce İndeks Tarihi: 22-06-2022

Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks

Öz:

This paper studies the impact of output, exchange rate, price, and economic policies (fiscal and monetary) shocks to Economic Community of West African States (ECOWAS) economies over the period 1977-2019. The results of the impulse response functions obtained from the panel VAR show that monetary policy shocks stimulate economic activity, whereas fiscal shocks lead to a contraction. Moreover, these economic policy shocks lead to an increase in the price level. Finally, they have opposite effects on the real exchange rate: a monetary policy shock leads to an appreciation of national currencies against the US dollar, while a fiscal innovation leads to a depreciation of these currencies. As for exchange rate and price shocks, they create inflation and consequently a decline in economic activity. Furthermore, the forecast error variance decomposition reveals that real exchange rate shocks contribute the most to future fluctuations in macroeconomic variables in ECOWAS countries. Moreover, a comparison of the impact on the two currency areas, West African Economic and Monetary Union (WAEMU) and West African Monetary Zone (WAMZ), shows the degree of asymmetry between the two areas. The analysis shows, on the one hand, that shocks are more persistent and significant in the WAMZ and, on the other hand, that except for real exchange rate shocks, the two zones respond asymmetrically to shocks emanating from the other variables.

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APA	NDONGO A, DIOP I (2021). Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks. , 61 - 87.
Chicago	NDONGO Asta,DIOP Ibrahima Thione Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks. (2021): 61 - 87.
MLA	NDONGO Asta,DIOP Ibrahima Thione Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks. , 2021, ss.61 - 87.
AMA	NDONGO A,DIOP I Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks. . 2021; 61 - 87.
Vancouver	NDONGO A,DIOP I Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks. . 2021; 61 - 87.
IEEE	NDONGO A,DIOP I "Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks." , ss.61 - 87, 2021.
ISNAD	NDONGO, Asta - DIOP, Ibrahima Thione. "Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks". (2021), 61-87.

APA	NDONGO A, DIOP I (2021). Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks. World Journal of Applied Economics, 7(2), 61 - 87.
Chicago	NDONGO Asta,DIOP Ibrahima Thione Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks. World Journal of Applied Economics 7, no.2 (2021): 61 - 87.
MLA	NDONGO Asta,DIOP Ibrahima Thione Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks. World Journal of Applied Economics, vol.7, no.2, 2021, ss.61 - 87.
AMA	NDONGO A,DIOP I Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks. World Journal of Applied Economics. 2021; 7(2): 61 - 87.
Vancouver	NDONGO A,DIOP I Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks. World Journal of Applied Economics. 2021; 7(2): 61 - 87.
IEEE	NDONGO A,DIOP I "Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks." World Journal of Applied Economics, 7, ss.61 - 87, 2021.
ISNAD	NDONGO, Asta - DIOP, Ibrahima Thione. "Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks". World Journal of Applied Economics 7/2 (2021), 61-87.