Fractional integration in the West African Economic and Monetary Union

  1. Cárcel, Héctor 1
  2. Gil-Alana, Luis A. 1
  1. 1 Universidad de Navarra
    info

    Universidad de Navarra

    Pamplona, España

    ROR https://ror.org/02rxc7m23

Journal:
African Journal of Economic and Sustainable Development

ISSN: 2046-4770,  2046-4789

Year of publication: 2014

Volume: 3

Issue: 3

Pages: 179 - 199

Type: Article

DOI: 10.1504/AJESD.2014.065001 GOOGLE SCHOLAR lock_openOpen access editor

More publications in: African Journal of Economic and Sustainable Development

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.