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2008 AEC - Regional Euro - Currency Integration and Economic Growth in Sub - Saharan Africa
This paper examines the effects of regional euro-currency integration on economic growth in Sub-Saharan Africa. As having a currency pegged to the euro is likely to be a source of shocks to output, we parameterize a Solow growth model by specifying the level of technology as a function of membership in a regional euro-currency union. Parameter estimates from panel data indicate that for the two regional euro-currency unions we consider, membership in the Central African Economic and Monetary Community (CEMAC) had a positive effect on economic growth over the 1999 - 2007 time period. Our results suggest that the regional integration of currency has benefits in Sub-Saharan Africa, and the expansion of existing, or creation of additional euro-currency unions similar to CEMAC could improve living standards.