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Impact of monetary policy transmission mechanism in West African countries

Author

Listed:
  • Famoroti Jonathan Olusegun

    (University of Kwazulu-Natal, South Africa)

  • Adeleke Omolade

    (University of Kwazulu-Natal, South Africa)

Abstract

The study analyzed the impact of monetary policy shocks on economic growth in 12 countries of the Economic Community of West African States (ECOWAS), using quarterly data from 1980(1) to 2017(4). We employed a Panel Structural Vector Autoregressive (Panel SVAR) for the modeling of monetary policy transmission shock in the segregated sub-regions of WAMZ and WAEMU. The key results suggest that fluctuations of the monetary policy do not have significant effects on the economic growth but significantly impact the general price level. Moreover, the study finds that the exchange rate is persistently a vital mechanism that significantly influences the variables of the real economy. Our estimates further suggest that there is idiosyncratic evidence found in the results, which is the anomaly of the Price puzzle.

Suggested Citation

  • Famoroti Jonathan Olusegun & Adeleke Omolade, 2022. "Impact of monetary policy transmission mechanism in West African countries," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 32(1), pages 20-42, March.
    • Handle: RePEc:vrs:suvges:v:32:y:2022:i:1:p:20-42:n:3
    DOI: 10.2478/sues-2022-0002
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    More about this item

    Keywords

    Economic growth; ECOWAS; Monetary policy shocks; and Panel SVAR;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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