Commonalities in the levels and movements of the inflation rates among countries in the East African Community

• In this study, we investigate the degree to which inflation rates and their movements for countries in the East African Community (EAC) have become more similar, which is an important issue for the EAC’s goal of creating a common currency. We find that the five EAC countries (excluding South Sudan) have had a tendency to converge in their inflation-rate levels, and we show through an inflation-movement similarity index that inflation-rate changes between consecutive months trended toward becoming more similar between 1995 and 2018 for most country pairs from these EAC countries. We also find that the inflation correlations between these EAC countries seem favorable for monetary union when comparing these correlations to analogous ones for the 2001 European Monetary Union countries prior to the creation of the euro and to analogous ones for the West African Economic Monetary Union countries.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

East African Monetary Union

optimum currency area

inflation

Publikations- och innehållstyp

ref (ämneskategori)

art (ämneskategori)