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Fonction de reaction de la banque centrale et credibilite de la politique monétaire: Cas de la BEAC
[Central Bank reaction fonction and monetary policy credibility: The case of BEAC]

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  • KAMGNA, Severin Yves
  • NGUENANG, Christian
  • TALABONG, Hervé
  • OULD, Isselmou

Abstract

In this paper, using monetary policy rules, we build a model which describes the fixing of the interest rate by the Bank of Central African's States (BEAC). First, with a GMM adapted for a forward looking rule, we propose a reaction function for this central bank. The result shows that from 1986 to 2006, the formulation of the monetary policy strongly depends on the past interest rate. The rule describes well the interest rate fixation process by the BEAC which tends to be guide mainly by price stability than growth objectives. Secondly, we estimate a simple rule using an error correction model. In this case, the results were better but confirm those issued by the GMM method.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 16557.

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Date of creation: Jul 2009
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Handle: RePEc:pra:mprapa:16557

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Related research

Keywords: Taylor rules; Bank; Central Bank; Fonction de reaction; Banque centrale; CEMAC; BEAC; GMM; Monetary policy rules;

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References

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  1. Marilyne Huchet-Bourdon, 2003. "Fonctions de réaction des banques centrales européennes et convergence," Post-Print, HAL halshs-00143784, HAL.
  2. Bennett T. McCallum, 1997. "Issues in the Design of Monetary Policy Rules," NBER Working Papers 6016, National Bureau of Economic Research, Inc.
  3. Svensson, Lars E. O., 1998. "Inflation targeting as a monetary policy rule," CFS Working Paper Series 1998/16, Center for Financial Studies (CFS).
  4. Athanasios Orphanides, 2007. "Taylor rules," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2007-18, Board of Governors of the Federal Reserve System (U.S.).
  5. Athanasios Orphanides, 2003. "Historical monetary policy analysis and the Taylor rule," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2003-36, Board of Governors of the Federal Reserve System (U.S.).
  6. Gerlach-Kristen, Petra, 2003. "Interest rate reaction functions and the Taylor rule in the euro area," Working Paper Series, European Central Bank 0258, European Central Bank.
  7. repec:fth:bfdipa:18/2001 is not listed on IDEAS
  8. Taylor, John B., 1998. "The Robustness and Efficiency of Monetary Policy Rules as Guidelines for Interest Rate Setting by the European Central Bank," Seminar Papers, Stockholm University, Institute for International Economic Studies 649, Stockholm University, Institute for International Economic Studies.
  9. Richard Clarida & Jordi Gali & Mark Gertler, 1997. "Monetary Policy Rules in Practice: Some International Evidence," NBER Working Papers 6254, National Bureau of Economic Research, Inc.
  10. Robert J. Barro & David B. Gordon, 1983. "Rules, Discretion and Reputation in a Model of Monetary Policy," NBER Working Papers 1079, National Bureau of Economic Research, Inc.
  11. Svensson, Lars E. O., 2000. "Open-economy inflation targeting," Journal of International Economics, Elsevier, Elsevier, vol. 50(1), pages 155-183, February.
  12. Mésonnier, J-S. & Renne, J-P., 2004. "Règle de Taylor et politique monétaire dans la zone euro," Working papers, Banque de France 117, Banque de France.
  13. Lars E. O. Svensson, 2003. "What Is Wrong with Taylor Rules? Using Judgment in Monetary Policy through Targeting Rules," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 41(2), pages 426-477, June.
  14. Taylor, J.B., 1998. "The Robustness and Efficiency of Monetary Policy Rules as Guidelines for Interest Rate Setting by European Central Bank," Papers, Stockholm - International Economic Studies 649, Stockholm - International Economic Studies.
  15. Huang, Angela & Margaritis, Dimitri & Mayes, David, 2001. "Monetary policy rules in practice: Evidence from New Zealand," Research Discussion Papers, Bank of Finland 18/2001, Bank of Finland.
  16. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 85(3), pages 473-91, June.
  17. Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, Elsevier, vol. 39(1), pages 195-214, December.
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Cited by:
  1. BESSO, Christophe Raoul & Chameni Nembua, Célestin, 2013. "CONTRAT OPTIMAL EN ZONE MONETAIRE HETEROGENE : Cas de la Zone Franc
    [OPTIMAL CONTRACT IN HETEROGENEOUS ECONOMIC MONETARY UNION:case of zone Franc]
    ," MPRA Paper 47256, University Library of Munich, Germany.

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