MONETARY POLICY, MONETARY STABILITY AND ECONOMIC GROWTH IN THE DEMOCRATIC REPUBLIC OF CONGO

POLITIQUE MONETAIRE, STABILITE MONETAIRE ET CROISSANCE ECONOMIQUE EN REPUBLIQUE DEMOCRATIQUE DU CONGO

Hénock Katuala ()
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Hénock Katuala: UPC - Université protestante au Congo

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Abstract: This paper attempts to assess the impact of monetary policy on monetary stability (internal and external) and economic growth in DR Congo from 1990-2019. In this sense, we evaluated the empirical properties of the Congolese monetary multiplier through the analysis of its stability and its predictability. The ADF unit root, cointegration (Engle-Granger, 1987) and four (4) ARIMA (Box-Jenkins) models were used for these purposes. The Bayesian estimation of the structural VAR model (B-SVAR) was carried out on the quarterly series obtained after disaggregation (Denton, 1971). The causality of Granger (1969) and the cointegration of Johansen (1991) made it possible to rule on the links between variables. The identification of model shocks is inspired by the work of Binning (2013) which combines the restrictions of signs and zeros both in the short term and in the long term within the framework of under-identified structural VAR models. Our results revealed the following stylized facts: (i) the existence of a long-term relationship between the base and the money supply. This could justify the use of the multiplier in the conduct of policy and monetary targeting in DR Congo; (ii) the shocks on the key rate have not had any expected impact on economic growth; (iii) oil prices have remained rigid and (iv) demand shocks impact the dynamics of monetary stability.

Keywords: Monetary policy; Inflation; International exchange reserves; Economic growth; Bayesian analysis; Politique monétaire; Réserves internationales de changes; Croissance économique; Analyse bayésienne (search for similar items in EconPapers)
Date: 2020-05-24
New Economics Papers: this item is included in nep-mac
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