Heterogeneity of the Maghreb: the results of optimized monetary rules

The launch of the euro has fed doubts concerning the constitution of an optimal European monetary zone. Indeed, the differences in legal, institutional and cultural frameworks… as well as the diversity of the productive and financial European systems may have led to the idea that Europe does not constitute a viable monetary zone. In Africa, the decision of African Central Bank governors to adopt a single currency by 2021 and the call from the union of Maghreb banks in November 2007 to create one currency for the Maghreb (Algeria, Libya, Morocco, Mauritania and Tunisia) raises the same doubts as to the efficiency of such decisions. In this preliminary work, we have tried to evaluate implicitly the pertinence of such decision by showing in a first section the heterogeneity of Maghrebian monetary regimes. We have tried to illustrate in a second section this heterogeneity via a model describing the functioning of the economy of these countries. Finally, we have attempted to show in a third section the consequences of these heterogeneities by simulating optimal monetary rules defined for each country. Our results suggest that these countries will need divergent Taylor rules and that the decision to belong to the same monetary union where a common monetary policy will be conducted proved to be unsuitable.