Assessing Inflation Convergence in the East African Community

2018 ◽  
Vol 31 (2) ◽  
pp. 119-136 ◽  
Author(s):  
Jemma Dridi ◽  
Anh D.M. Nguyen
Keyword(s):  
East African ◽  
East African Community ◽  
African Community ◽  
Inflation Convergence

Inflation Convergence in the East African Community: A Fractional Integration and Cointegration Study

2015 ◽  
Vol 15 (4) ◽  
pp. 507-524 ◽  
Author(s):  
Hector Carcel ◽  
Luis A. Gil-Alana ◽  
Godfrey Madigu
Keyword(s):  
Monetary Union ◽  
Fractional Integration ◽  
Fractional Cointegration ◽  
East African ◽  
Convergence Hypothesis ◽  
East African Community ◽  
Long Run ◽  
Inflation Rates ◽  
African Community ◽  
Inflation Convergence

In this study we have examined the inflation convergence hypothesis in the five countries that belong to the East African Community and which recently signed a protocol outlining their plans for launching a monetary union within ten years. We check for common patterns in the persistence in the inflation levels. As it is argued in the literature, countries hoping to form a monetary union should present similar inflation patterns. Our study shows that the inflation rates in these countries present orders of integration equal to higher than one in all cases, confirming that shocks will most certainly not recover in the long run. Moreover, fractional cointegration relationships are also found across all the countries with the exception of Tanzania, suggesting that this country displays a different pattern compared to the remaining four, presenting also some evidence of a break in the data.

Sign in / Sign up

Export Citation Format

Share Document