Macroeconomic convergence within EAC countries : towards a single currency, pp. 251-276
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Date
2011-01
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UB, Cahiers du CURDES
Abstract
This paper investigates the extent of rnacroeconomic convergence in the EAC countries using the "sigma convergence hypothesis" on the GDP growth rates, on the CPI growth rates and on the rnonetary variables. The .results detected sorne mixed and incoherent evidence of macroeconomie convergence, with
convergence being established only for sorne countries and on very few indicators. With respect ta GDP growth rate, a nominal variable, there is evidence of lack of convergence on overall and little evidence convergence on monetary policy variables in sorne instances, while no convergence has been evidenced for fiscal policy variables.
It is obvious that within the EAC countries, there is a strong need ta increase policy harmonization and co-ordination sa as ta stimulate rnacroeconomic convergence and policy environment effectiveness. The national planning strategies should include stability criteria and rnacroeconomic convergence benchmarks as ta ensure effective convergence and ta bring the regional integration process ta its success.
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NDEREYAHAGA Richard, Macroeconomic convergence within EAC countries : towards a single currency, pp. 251-276, Cahiers du CURDES n° 12, Janvier 2011.