WITHDRAWN: Monetary policy channels, sectoral outputs and sustainable growth in ECOWAS region: A rigorous analysis and implications for policy

Abstract

The market-based monetary policy framework has been favoured by ECOWAS economies. Hence this study investigated the effect of monetary policy channels on the sectoral value added and sustainable economic growth in ECOWAS. Data from World Bank and International Monetary Fund over 2013 – 2019 were sourced for thirteen member countries. ECOWAS is found to have very high inflation level, interest and exchange rates. Furthermore, using the Driscoll-Kraay fixed-effects OLS estimator, the findings revealed that while the effect of monetary policy channels on the agricultural sector value added is largely heterogenous and significantly inelastic, the one on the industrial and services sectors are overwhelmingly homogeneous and negative, but insignificant for the services sector. Moreover, the effect of monetary policy channels on sustainable economic growth is also homogeneously asymmetric, with imminent stagflation, while the interactive effects of monetary policy channels are heterogeneous on sustainable economic growth and economic sectors. Therefore, an inflation targeting monetary policy stance is generally recommended with prioritised exchange rate stabilisation amid sufficient fiscal space.