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Can The Monetary Integration Of Ecowas Improve Intra-Regional Trade?, Chinweuba E. Ezekwesili Jan 2011

Can The Monetary Integration Of Ecowas Improve Intra-Regional Trade?, Chinweuba E. Ezekwesili

CMC Senior Theses

A gravity model is used to evaluate the effects of currency union on intra-regional trade of ECOWAS (Economic Community of West African States) member states. The panel data used includes bilateral observations for fourteen years spanning 1994 through 2006 for 16 countries. Controlling for determinants and deterrents of trade, I find the presence of a currency union three times as likely to increase intra-regional trade between ECOWAS member countries. In addition, I find that the effect on trade creation has been steadily falling since 1994.