Global Advanced Research Journal of Economics, Accounting and Finance (GARJEAF)
March 2016 Vol. 4(1), pp. 011-014
Copyright © 2016 Global Advanced Research Journals
Full Length Research Paper
Can Eastern African Monetary Union Become a successful OCA? Comparisons with the Euro zone case
Accepted 31 July 2015
As long as the Eastern African Monetary Union (EAMU) is on its way debate on its fruition raises under the economic turbulence caused by Euro’s non performance after only 16 years of existence. Using Monga’s (1997) model on whether a monetary union is an OCA or not modified for the EAC we currently deploy eleven equal indicators checking the synchronization and symmetry of the future East African Shilling. The results show that under the existing conditions of both participants and the community in contrast to the European one a common currency can format an Optimum Currency Area effecting positively all current and future members.
Keywords: Optimum Currency Area,Symmetries,Developing economies,Economic freedom.
JEL Classification: E 42, E 52, F 41.