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External Shocks and Monetary Policy Effectiveness: A Review of Extant Methodologies

Author

Listed:
  • Kordzo Sedegah

    (South Africa, Pretoria)

  • Nicholas M. Odhiambo

    (South Africa, Pretoria)

  • Simplice A. Asongu

    (South Africa, Pretoria)

Abstract

This study reviews the extant methodologies in research focusing on the nexus between external shocks and monetary policy effectiveness. It is premised on the argument that the adopted methodology to examining the empirical validity and plausibility of estimated models is fundamental in monetary policy effectiveness in the light of external shocks. Hence, the choice of the methodological approach translates the effectiveness of corresponding monetary policy rules and institutions. It is established in the review that the extant literature converges on a set of methodological underpinnings that are relevant in assessing the effects of external shocks on monetary policy effectiveness. Such convergence is documented in this study by assessing country-specific and panel-oriented studies focusing on non-WAEMU (West African Economic and Monetary Union) countries, especially in terms of information criteria motivating the choice of extant methodologies.

Suggested Citation

  • Kordzo Sedegah & Nicholas M. Odhiambo & Simplice A. Asongu, 2026. "External Shocks and Monetary Policy Effectiveness: A Review of Extant Methodologies," Working Papers 26/038, European Xtramile Centre of African Studies (EXCAS).
    • Handle: RePEc:exs:wpaper:26/038
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    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • F15 - International Economics - - Trade - - - Economic Integration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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