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n African Finance Journal - How would monetary policy matter in the proposed African monetary unions? Evidence from output and prices

Volume 16, Issue 2
  • ISSN : 1605-9786
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Abstract

We analyze the effects of monetary policy on economic activity in the proposed African monetary unions. Findings broadly show that: (1) but for financial efficiency in the EAMZ, monetary policy variables affect output neither in the short-run nor in the long-term and; (2) with the exception of financial size that impacts inflation in the EAMZ in the short-term, monetary policy variables generally have no effect on prices in the short-run. The WAMZ may not use policy instruments to offset adverse shocks to output by pursuing either an expansionary or a contractionary policy, while the EAMZ can do with the 'financial allocation efficiency' instrument. Policy implications are discussed.

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/content/finj/16/2/EJC162395
2014-01-01
2016-12-10

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