Abstract
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.