What determines monetary policy in the Franc zone? : estimating a reaction function for the BCEAO

Shortland, Anja and Stasavage, David (2004) What determines monetary policy in the Franc zone? : estimating a reaction function for the BCEAO. Journal of African Economies, 13 (4). pp. 518-535. ISSN 1464-3723

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Abstract

This paper examines to what extent the central bank for the West African Economic and Monetary Union (BCEAO) has used interest rate policy in response to domestic economic developments. We show that while in the long run the BCEAO matches changes in French (Eurozone) interest rates one for one, in the short run it retains freedom to react to domestic economic variables, such as inflation, the output gap, its foreign exchange position and government borrowing.

Item Type:	Article
Official URL:	http://jae.oupjournals.org/
Additional Information:	(c) 2004 Oxford University Press.
Divisions:	LSE
Subjects:	H Social Sciences > HG Finance J Political Science > JF Political institutions (General)
Date Deposited:	05 Jul 2007
Last Modified:	11 Dec 2024 22:46
URI:	http://eprints.lse.ac.uk/id/eprint/229

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