Monetary union in West Africa faces challenges with supply shocks
The article examines the impact of a monetary union in West Africa on economic shocks. Instead of using traditional models, the researchers used dynamic factor models to analyze the fluctuations in supply and demand shocks across countries. The results suggest that West African countries may struggle to adjust to supply shocks if they form a monetary union, as these shocks are not well-aligned. However, demand shocks are more similar among French-speaking countries in the region.