Globalization and monetary policy rule in West African Monetary Zone: A generalized method of moment approach

Perekunah Eregha and Festus O. Egwaikhide ()
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Festus O. Egwaikhide: University of Ibadan, Nigeria

Applied Econometrics, 2018, vol. 49, 57-66

Abstract: This study examines the effect of global factors on domestic monetary policy reaction functions of five West African Monetary Zone (WAMZ) countries for the period 1980–2015. The generalized method of moment approach was used for the estimation on the policy reaction function. The study provides strong evidence that global inflation and output gap influenced monetary policy decisions of Central Bankers in the countries of WAMZ. Therefore, it is recommended that global variables should not be ignored and be given appropriate weight while forecasting domestic inflation and making monetary policy rules.

Keywords: global inflation; global output gap; monetary policy reaction function; GMM. (search for similar items in EconPapers)
JEL-codes: E31 E43 E52 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (6)

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