Title: Fractional integration in the West African Economic and Monetary Union
Authors: Héctor Cárcel; Luis A. Gil-Alana
Addresses: Navarra Center for International Development, University of Navarra, ICS, Campus Universitario, E-31009, Pamplona, Spain ' Faculty of Economics, Navarra Center for International Development University of Navarra, ICS, Edificio Amigos, E-31080 Pamplona, Spain
Abstract: This paper examines the time series behaviour of three variables (GDP, price level of consumption and population) in the eight countries that belong to the West African Economic and Monetary Union (WAEMU), which are Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo. The reason for carrying out this study lies on the considerable heterogeneity that can be perceived in the data from these countries. We conduct a long memory and fractional integration modelling framework and we also identify potential breaks in the data. The aim of the study is to perceive up to which degree the eight West African countries that belong to the same monetary union follow the same stability economic patterns. Testing for mean reversion we only found strong evidence of it in the case of Senegal for the price level of consumption, and in the cases of Benin, Burkina Faso and Senegal for GDP.
Keywords: West Africa; WAEMU; West African Economic and Monetary Union; fractional integration; GDP; consumption price level; population; modelling; economic stability; gross domestic product; Benin; Burkina Faso; Côte d'Ivoire; Guinea-Bissau; Mali; Niger; Senegal; Togo; economic patterns.
DOI: 10.1504/AJESD.2014.065001
African Journal of Economic and Sustainable Development, 2014 Vol.3 No.3, pp.179 - 199
Published online: 30 Sep 2014 *
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