What determines monetary policy in the Franc zone? : estimating a reaction function for the BCEAO
AbstractThis paper examines to what extent the central bank for the West African Economic and Monetary Union (BCEAO) has used interest rate policy in response to domestic economic developments. We show that while in the long run the BCEAO matches changes in French (Eurozone) interest rates one for one, in the short run it retains freedom to react to domestic economic variables, such as inflation, the output gap, its foreign exchange position and government borrowing.
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Bibliographic InfoPaper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 229.
Date of creation: Dec 2004
Date of revision:
Publication status: Published in Journal of African Economies, December, 2004, 13(4), pp. 518-535. ISSN: 1464-3723
Other versions of this item:
- Anja Shortland & David Stasavage, 2004. "What Determines Monetary Policy in the Franc Zone? Estimating a Reaction Function for the BCEAO," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 13(4), pages 518-535, December.
- F3 - International Economics - - International Finance
- G3 - Financial Economics - - Corporate Finance and Governance
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