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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]

Author

Listed:
  • 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.

Suggested Citation

  • KAMGNA, Severin Yves & NGUENANG, Christian & TALABONG, Hervé & OULD, Isselmou, 2009. "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]
    ," MPRA Paper 16557, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:16557
    as

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    File URL: https://mpra.ub.uni-muenchen.de/16557/1/MPRA_paper_16557.pdf
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    References listed on IDEAS

    as
    1. Barro, Robert J. & Gordon, David B., 1983. "Rules, discretion and reputation in a model of monetary policy," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 101-121.
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    3. 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, vol. 41(2), pages 426-477, June.
    4. Clarida, Richard & Gali, Jordi & Gertler, Mark, 1998. "Monetary policy rules in practice Some international evidence," European Economic Review, Elsevier, vol. 42(6), pages 1033-1067, June.
    5. Svensson, Lars E. O., 2000. "Open-economy inflation targeting," Journal of International Economics, Elsevier, vol. 50(1), pages 155-183, February.
    6. Huchet-Bourdon, Marilyne, 2003. "Fonctions de réaction des banques centrales européennes et convergence," L'Actualité Economique, Société Canadienne de Science Economique, vol. 79(3), pages 297-326, Septembre.
    7. McCallum, Bennett T., 1999. "Issues in the design of monetary policy rules," Handbook of Macroeconomics,in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 23, pages 1483-1530 Elsevier.
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    10. Athanasios Orphanides, 2007. "Taylor rules," Finance and Economics Discussion Series 2007-18, Board of Governors of the Federal Reserve System (U.S.).
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    12. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
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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.

    More about this item

    Keywords

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

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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