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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]

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

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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File URL: https://mpra.ub.uni-muenchen.de/16557/1/MPRA_paper_16557.pdf
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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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  1. 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.
  2. Svensson, Lars E. O., 1998. "Inflation targeting as a monetary policy rule," CFS Working Paper Series 1998/16, Center for Financial Studies (CFS).
  3. Athanasios Orphanides, 2003. "Historical monetary policy analysis and the Taylor rule," Finance and Economics Discussion Series 2003-36, Board of Governors of the Federal Reserve System (U.S.).
  4. repec:hhs:bofrdp:2001_018 is not listed on IDEAS
  5. Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
  6. Lars E. O. Svensson, 2000. "Open-Economy Inflation Targeting," NBER Working Papers 6545, National Bureau of Economic Research, Inc.
  7. Huang, Angela & Margaritis, Dimitri & Mayes, David, 2001. "Monetary policy rules in practice : Evidence from New Zealand," Research Discussion Papers 18/2001, Bank of Finland.
  8. Lars E. O. Svensson, 2003. "What is Wrong with Taylor Rules? Using Judgment in Monetary Policy through Targeting Rules," NBER Working Papers 9421, National Bureau of Economic Research, Inc.
  9. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June.
  10. 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.
  11. Athanasios Orphanides, 2007. "Taylor rules," Finance and Economics Discussion Series 2007-18, Board of Governors of the Federal Reserve System (U.S.).
  12. Isabelle Cadoret-David & Franck Martin & N. Herrard & S. Tanguy & C. Benjamin, 2009. "Econométrie appliquée," Post-Print halshs-00078345, HAL.
  13. 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.
  14. Taylor, John B., 1999. "The robustness and efficiency of monetary policy rules as guidelines for interest rate setting by the European central bank," Journal of Monetary Economics, Elsevier, vol. 43(3), pages 655-679, June.
  15. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November.
  16. Clarida, Richard & Gali, Jordi & Gertler, Mark, 1997. "Monetary Policy Rules in Practice: Some International Evidence," Working Papers 97-32, C.V. Starr Center for Applied Economics, New York University.
  17. Mésonnier, J-S. & Renne, J-P., 2004. "Règle de Taylor et politique monétaire dans la zone euro," Working papers 117, Banque de France.
  18. Gerlach-Kristen, Petra, 2003. "Interest rate reaction functions and the Taylor rule in the euro area," Working Paper Series 0258, European Central Bank.
  19. Taylor, J.B., 1998. "The Robustness and Efficiency of Monetary Policy Rules as Guidelines for Interest Rate Setting by European Central Bank," Papers 649, Stockholm - International Economic Studies.
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