Dynamics of Economic Integration and Cycle Synchronization: International Trade Theories Tested in the Cemac Zone
DOI:
https://doi.org/10.47941/ijdcs.2851Keywords:
Synchronization, Economic Cycles, Trade intensity, CEMAC.Abstract
Purpose: This study analyzes the effects of monetary integration through intra-regional trade on the synchronisation of economic cycles in the CEMAC.
Methodology: This study applies a panel data model with specific effects to five of the six countries that make up the Central African Economic and Monetary Community: Cameroon, Congo, Chad, the Central African Republic, and Gabon. The data used come from two sources: The World Development Indicators (WDI) for the analysis of business cycle synchronization, and the UN Comtrade database for bilateral trade data, over a time horizon ranging from 1982 to 2018.
Findings: the findings suggest that, economic and monetary integration within the CEMAC framework has not been accompanied by a synchronization of business cycles.
Unique contribution to theory, practice and policy: From a theoretical perspective, the study of economic integration dynamics and cycle synchronization in CEMAC provides a new perspective by combining several economic theories. Rather than strictly applying Mundell's classical theory, this study adopts a more flexible approach that integrates endogenous criteria specific to African economies. From a political perspective, this topic highlights innovative reforms to improve economic integration in CEMAC, and provides an original approach proposing better coordination between CEMAC institutions and the BEAC for the harmonization of monetary and fiscal policies. From a practical perspective, it proposes the development of transnational infrastructure, likely to promote better connectivity between member countries, which could strengthen trade and improve the synchronization of economic cycles.
Downloads
References
Abiad, Abdul, Davide Furceri, Sebnem Kalemli-ozcan & Andrea Pescatori (2013). Dancing together? Spillovers, common Shocks and the Role of financial and trade linkages. World Economic Outlook, pp.81-111.
Baldwin, R., (2005). The Euro’s Trade Effects. Mimeo, Graduate Institute of International Studies.
Baltagi, B. H. (2001). Econometrics Analysis of Panel Data. Wiley Chichester.
Baxter, M. & Kouparitsas (2005). Determinants of Business Cycle Comovement: A Robust Analysis. Journal of Monetary Economics. Vol. 52, n° 1. PP.113-157.
Calderon, C., Chong, A. & Stein, E., (2007). Trade intensity and business cycle synchronization: Are developing countries any different? Journal of International Economics. Vol.71, pp.2-21.
Cheikh, T.N., Idossou, M.A. & Papa, D.A.D. (2019). Intégration économique et synchronisation des cycles de croissance dans la zone UEMOA : une approche en panel dynamiques. Revue internationale des économistes de langue française, vol. 4, n°2.
Duval, R., Cheng, K., Hwa Oh, K., Saraf, R. & Senevirante, D., (2014). Trade Integration and Business Cycle Synchronization: A Reappraisal with Focus on Asia. IMF.Working Paper, WP/14/52.
Fiess, N. (2005). Business cycle synchronization and regional integration: A case study for Central America. World Bank Policy Research, Working paper, 3584.
Frankel, J. & Rose, A. (1997). Is EMU more justifiable ex post than ex ante? European Economic Review. Vol.41, n°3-5, pp.753-760.
Frankel, J. & Rose, A., 1998 “The Endogeneity of the Optimum Currency Area Criteria”, The Econonic Journal, N°108.
Freeman. & Pienknagura, S. ( 2019). Are all Trade Agreements Equal? The role of Distance in Shiping the Effect of Economic Integration Agreements on trade Flows. Review of World Economics.
Glick, R. & Rose, A. (2002). Does a Currency Union affect Trade? The time-series Evidence. European Economic Review. Vol.46.
Gnimassoun, B., Avom, D. & Keneck-Massil, J., (2016). L’intégration régionale en zone CFA est-elle soutenable à long terme ? Bureau d’Economie Théorique et Appliquée, Document de travail n°45.
Gruben, William, C. ; Koo, Jahyeong, Millis, Eric, (2000). Does International Trade Affect Business Cycle Synchronization? Manuscript, Federal Reserve Bank of Dallas, November.
Hodrick, R.J. & Prescott, E. (1980). Postwar U.S. Business Cycles: An Empirical Investigation. Carnegie Mellon University. Discussion paper, n°451.
Inklaar, R., Jong-A-Pin, R. & Haan, J. (2008). Trade and Business Cycle Synchronization in OECD countries, a re-examination”, European Economic Review. Vol.52, pp.646-666.
Kamdoum, K. (2020). Cycles Synchronization and Economic Convergence in the ECCAS Zone. Theoretical Economics Letters.
Kenen, P. (1969). The Theory of Optimum Currency Areas: An Eclectic View. In R. Mundell and A. Swobboda (Ed.) Monetary problems of international economy, New-York: University of Chicago Press.
Krugman, P. (1990). Rethinking International Trade. Cambridge, MA: MIT Press.
Krugman, P. (1993). Lessons of Massachusetts for EMU. In F. Torres and F. Giavazzi (Ed.) Adjustment and Growth in European Monetary Union, Cambridge University Press, pp.241-261.
Mbou Likibi., S. (2015). Cycles Économiques dans la Zone Cemac. Journal of Economics and Development Studies. Vol.3, pp. 169-184.
Mbou Likibi, S. (2018). Effets de l’intégration financière sur la synchronisation des cycles économiques : cas de la Cemac. Annales de l’université Marien N’GOUABI, 2018, 18(2), pp. 283-299.
McKinnon, R. (1963). Optimum Currency Areas. American Economy Review. Vol.53, pp.657- 665.
Mpabe Bodjongo. & Bikai,J. (2018). Caractérisation et datation des cycles économiques des pays de la CEEAC. Banque des Etats de l’Afrique Centrale.
Mundell, R. (1961). A Theory of Optimum Currency Areas. American Economic Review. Vol. 51, pp. 657-665.
Nenghem Takam (2024). Thesis titled “Three Essays on the Effects of Capital Flows on Economic Cycles in the CEMAC Zone”
Penot, A., J.-P, Polin & Seltz (2000). Hétérogénéité de la zone euro et politique monétaire unique. Papier présenté aux 17èmes Journées du GdR Economie Monétaire et Financière, Lisbonne.
Sevestre, P. (2002). Econométrie des Données de Panel. Dunod, Paris.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Zolo Eyea Alain Remy (PhD)
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
