North-South Asymmetric Relationships: Does the EMU Business Affect Small African Economies ?

Nyembwe André and Konstantin Kholodilin ()

No 2005032, Discussion Papers (ECON - Département des Sciences Economiques) from Université catholique de Louvain, Département des Sciences Economiques

Abstract: In this paper we empirically investigate a possible transmission of the European business cycle to Sub-Saharan Africa’s economies. This linkage may be of interest because the EMU is the main trading partner of African countries, and many of these countries use the euro as either the official or a de facto anchor in order to keep the exchange rate fixed or stable. After identifying possible theoretical channels of transmission, we test whether the relevant economic variables in Africa are sensitive to the fluctuations of European economic activity. Using either a Euro area GDP series or a Stock and Watson approach in order to build indicators of economic fluctuations to Sub-Saharan Africa despite the appealing theoretical linkages between the two areas. The most important relationship we manage to disentangle is between the European and African monetary policies.

Keywords: North-South linkages; Business cycles; EMU; African economies; Sub-Saharan Africa (search for similar items in EconPapers)
JEL-codes: C32 E31 E32 F41 (search for similar items in EconPapers)
Pages: 40
Date: 2005-08-01
New Economics Papers: this item is included in nep-afr, nep-eec and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvec:2005032

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