Abstract
Abstract The study analyzed the impact of monetary policy shocks on economic growth in 12 countries of the Economic Community of West African States (ECOWAS), using quarterly data from 1980(1) to 2017(4). We employed a Panel Structural Vector Autoregressive (Panel SVAR) for the modeling of monetary policy transmission shock in the segregated sub-regions of WAMZ and WAEMU. The key results suggest that fluctuations of the monetary policy do not have significant effects on the economic growth but significantly impact the general price level. Moreover, the study finds that the exchange rate is persistently a vital mechanism that significantly influences the variables of the real economy. Our estimates further suggest that there is idiosyncratic evidence found in the results, which is the anomaly of the Price puzzle.
Highlights
IntroductionIntroduction and BackgroundIn the course of time, several debates have emerged in the economic literature concerning the relationship between monetary policy and economic growth
Introduction and BackgroundIn the course of time, several debates have emerged in the economic literature concerning the relationship between monetary policy and economic growth
As revealed by the results of the estimates the shocks of the monetary policy instrument of interest rate and the exchange rate do have a significant effect on the economic growth and economic stability of Economic Community of West African States (ECOWAS)
Summary
Introduction and BackgroundIn the course of time, several debates have emerged in the economic literature concerning the relationship between monetary policy and economic growth. (2022) Impact of monetary policy transmission mechanism in West African countries policy influence the variations in the macro-economic variables? According to Nkwatoh (2018), no ECOWAS member nation has been able to achieve all the required convergence criteria for their monetary union since the agreement in 2001 Their level of macro-economic convergence does not suffice to attain the set goal. In Sierra Leone the inflation rate between 2016 and 2018 was 10.9%, 18.2%, and 16.0%, respectively.; in Nigeria between 2016 and 2018, it was 12.7%, 16.5% and 12.1%, respectively; while in Ghana the inflation records were 11.7%,15.5%,17.1% and 12.4% for the year 2013 to 2017, respectively This implies that the economic growth and stability in many developing countries have been majorly threatened by double-digit inflation, whereas their monetary anchors have been tailored towards a pro-growth policy stance.
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