Autore: Stanley Abban,Grace Ofori-Abebrese
Formato: Copertina flessibile
Pagine: 64
Data Pubblicazione: 2020-08-13
Edizione: 1
Lingua: English
Descrizione:
Currency union is viewed as a panacea for struggling economies with West Africa in their quest to adopt a common currency. However, despite the rattling efforts and measures laid down, the policy seems unrealistic and deemed to fail. The study empirically evaluates whether adopting a common currency in the ECOWAS subregion will have a substantial impact on trade using data spanning from 2000 to 2017. Also, the study investigates whether adopting a common currency will have a trade creation or trade diversion effect. The study further estimates the trade potential of the ECOWAS subregion. The study deployed the Poisson Pseudo Maximum Likelihood (PPML) which is the most consistent estimator of the gravity model of trade and addresses issues about panel data. The study showed that adopting a common currency will ensure trade hence economic growth by eliminating exchange rate volatility among memberstates. In the background, the subregion will inure economic and other benefits with initiation of the policy.