Trade Integration and Business Cycle Synchronization among East African Community Countries.

This study uses a panel of 31 African countries for a period of 17 years to assess whether trade integration among these countries has led to the synchronization of their business cycle. This is an important issue to consider for entry into a monetary union. Unlike most previous studies, a time-varying index is applied to measure business cycle synchronization. The heterogeneous panel estimators reveal a positive relationship between the two variables among these African countries. This empirical finding should be considered by the East African Community (EAC) authorities for further debate on the readiness of the EAC Monetary Union. [ABSTRACT FROM AUTHOR]