Macroeconomic convergence in SACU : a panel unit root analysis

• Published: 2010
• Subjects: Southern African Customs Union; Macroeconomics; Convergence (Economics); Monetary policy; Economic indicators
• Online Access: http://hdl.handle.net/10210/3421

M.Comm. === This study uses annual data for five SACU members over the period 1991-2005 to investigate the evidence for convergence in macroeconomic variables. Panel unit root test as an econometric tool is utilised together with other several approaches for this analysis. The results show significant evidence that the SACU countries have reached a reasonable level of convergence on specific macroeconomic variables. This can be attributed to common economic policies and institutional features. It is also evident that the countries that are members of the CMA show a dramatically higher convergence rate. As far as monetary policy is concerned, a high degree of convergence has been achieved in SACU. However, the results show no convergence on fiscal policies. This could be attributed to data constraint on debt to GDP which was used as a proxy for fiscal policy.