External Shocks and Monetary Policy Effectiveness: A Review of Extant Methodologies

Kordzo Sedegah, Nicholas M. Odhiambo and Simplice Asongu
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Kordzo Sedegah: University of South Africa, South Africa
Nicholas M. Odhiambo: University of South Africa, South Africa

Journal of Economic Development, 2026, vol. 51, issue 1, 91-114

Abstract: This study reviews the extant methodologies in research focusing on the nexus between external shocks and monetary policy effectiveness. It is premised on the argument that the adopted methodology to examine the empirical validity and plausibility of estimated models is fundamental in monetary policy effectiveness in the light of external shocks. Hence, the choice of the methodological approach translates the effectiveness of corresponding monetary policy rules and institutions. It is established in the review that the extant literature converges on a set of methodological underpinnings that are relevant in assessing the effects of external shocks on monetary policy effectiveness. Such convergence is documented in this study by assessing country-specific and panel-oriented studies focusing on non-WAEMU (West African Economic and Monetary Union) countries, especially in terms of information criteria motivating the choice of extant methodologies.

Keywords: Methodology; External Shocks; Monetary Policy (search for similar items in EconPapers)
JEL-codes: C10 C50 F15 F36 F42 O55 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jecdev:022430

DOI: 10.35866/caujed.2026.51.1.004

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