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This paper explores and quantifies several aspects of the performance of currency unions using an augmented version of the gravity model and focusing on two samples, the world and Africa. Our empirical findings suggest that, in principle, membership in a currency union should benefit Africa as much as it does the rest of the world. In addition, we find evidence from both samples that the effect of currency unions on trade is large, almost a doubling; currency unions are associated with trade creation, increase price co-movements among members, and make trade more stable; and longer duration of currency union membership brings about more benefits, although with some diminishing returns.

Commerce -- Econometric models. --- Electronic books. -- local. --- Monetary unions -- Africa -- Econometric models. --- Monetary unions -- Econometric models. --- Finance --- Business & Economics --- International Finance --- Commerce --- Monetary unions --- Econometric models. --- Trade --- Common currencies --- Currency areas --- Currency unions --- Optimum currency areas --- Economics --- Business --- Transportation --- Currency question --- Money --- Traffic (Commerce) --- Merchants --- Econometrics --- Exports and Imports --- Labor --- Money and Monetary Policy --- Financial Aspects of Economic Integration --- Labor-Management Relations, Trade Unions, and Collective Bargaining: General --- Trade Policy --- International Trade Organizations --- Econometric Modeling: General --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- International economics --- Trade unions --- Econometrics & economic statistics --- Monetary economics --- Labor unions --- Plurilateral trade --- Gravity models --- Currencies --- International trade --- Econometric models --- South Africa