Inflation And Economic Growth Relationship In The West African Monetary Zone PDF Download
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Author | : Chioma P. Nwosu |
Publisher | : |
Total Pages | : |
Release | : 2018 |
Genre | : |
ISBN | : |
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Author | : Olorunsola E. Olowofeso |
Publisher | : |
Total Pages | : 0 |
Release | : 2022 |
Genre | : |
ISBN | : |
Download Threshold Effect of Inflation on Economic Growth in the West African Monetary Zone Book in PDF, ePub and Kindle
While previous studies have explored the relationship between inflation and economic growth, the existing literature on threshold effect of inflation on economic growth in the West African Monetary Zone (WAMZ) predominantly assumes a linear association, neglecting the possibility of nonlinearity. This study aims to fill the gap in the empirical literature by exploiting the variation in inflation rates across countries and over time to identify endogenously the threshold inflation level that affects economic growth in WAMZ countries over the period 2001-2019. The paper applies a Panel Smooth Transition Regression (PSTR) model, considering the heterogeneity in inflation rates across countries and over time and nonlinearities in the inflation-growth nexus. Results reveal an inflation threshold of 10.3 per cent per annum for WAMZ countries, showing that achieving moderate inflation below this threshold will stimulate economic growth while high inflation above the threshold is detrimental to growth. The result provides strong empirical support for the policy stance of WAMZ countries regarding the convergence criterion to contain inflation to a single-digit level. This finding highlights the importance of adopting moderate inflation target below the identified threshold of 10.3 percent to foster sustainable economic growth. It underscores the need for central banks to adopt more proactive approach to monetary policy by closely monitoring inflation levels and taking appropriate actions to keep inflation within this desired range. Indeed, the evidence of such a nonlinear relationship implies that central banks should pay close attention to managing inflation expectations, through measures including clear and effective communication of monetary policy actions, which would help anchor inflation expectations to ensure a favourable inflation environment that supports economic growth and improve credibility of monetary policy in the region.
Author | : |
Publisher | : |
Total Pages | : 356 |
Release | : 2007 |
Genre | : Inflation (Finance) |
ISBN | : |
Download West African Monetary Zone Book in PDF, ePub and Kindle
Author | : Cecilia Melo Fernandes |
Publisher | : International Monetary Fund |
Total Pages | : 19 |
Release | : 2023-06-19 |
Genre | : Business & Economics |
ISBN | : |
Download Inflation Dynamics in the West African Economic and Monetary Union Book in PDF, ePub and Kindle
This paper analyzes recent inflation developments in the WAEMU. As in all inflation spikes in the past two decades, food is the main driver of inflation. The contribution from energy prices is also increasing, while inflation contagion effects are still limited to a few sectors. The share of professionals that believe that inflation will continue above the target within the one-year horizon is at high levels compared to 2021. Based on projections from two models, the chapter also evaluates the appropriate monetary policy responses to the recent inflationary pressures. The results suggest that inflation is expected to converge to its target range within 24 months given the reduction of exogenous shocks weighing-in on food and energy prices, the exhaustion of base effects as well as a reduction in supply and demand imbalances. However, numerous external and internal factors affect inflation prospects and should be carefully monitored, given the pronounced uncertainty surrounding geopolitical and economic developments, and further monetary policy tighten would be necessary unless downside risks to forecasts for baseline inflation and external buffers improve.
Author | : International Monetary Fund. African Dept. |
Publisher | : International Monetary Fund |
Total Pages | : 84 |
Release | : 2018-04-25 |
Genre | : Business & Economics |
ISBN | : 148435298X |
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Selected Issues
Author | : International Monetary Fund. African Dept. |
Publisher | : International Monetary Fund |
Total Pages | : 74 |
Release | : 2021-03-02 |
Genre | : Business & Economics |
ISBN | : 1513571044 |
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Selected Issues
Author | : International Monetary Fund. African Dept. |
Publisher | : International Monetary Fund |
Total Pages | : 72 |
Release | : 2024-04-17 |
Genre | : Business & Economics |
ISBN | : |
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The WAEMU has seen strong growth and rising living standards over the past decade. Economic growth averaged 5.4 percent in 2013-2019 and 5.8 percent in 2021-2023. Policy efforts from regional and national authorities have cushioned the impact of several external and internal shocks, prompting a solid economic recovery since the COVID-19 pandemic, despite increasing security issues. Meanwhile, the Human Development Index has increased from 0.44 in 2013 to 0.48 in 2021.
Author | : International Monetary Fund. African Dept. |
Publisher | : International Monetary Fund |
Total Pages | : 70 |
Release | : 2015-04-13 |
Genre | : Business & Economics |
ISBN | : 1484326512 |
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This Selected Issues paper on West African Economic and Monetary Union presents external stability assessment report. The current account deficit declined in 2014. Although gross international reserve coverage has increased slightly, part of the current account deficit has been financed by a decline in commercial banks’ net foreign assets. Contingent on the implementation of government’s consolidation plans, and helped by a favorable oil price outlook, the current account deficit would further gradually decline and be matched by enough financial inflows in the medium term. According to various metrics, the real exchange rate appears to be broadly aligned with fundamentals. International reserve coverage should increase to provide stronger buffers against immediate short-term risks. Structural competitiveness and investment efficiency improvements will be essential to ensure that the planned large investment programs translate into growth and export gains as well as increased private inflows into the region.
Author | : Makiliwè Barcola |
Publisher | : |
Total Pages | : 21 |
Release | : 2019 |
Genre | : |
ISBN | : |
Download Inflation-Growth Nexus and Regional Integration in West Africa Book in PDF, ePub and Kindle
In this paper, we test the existence of an optimal inflation interval within which, the inflation of the west African countries supports economic growth. Besides this objective, we seek to test the validity of the 5% inflation threshold not to be exceeded, proposed as a convergence criterion for the fifteen countries of the region called to form a monetary union by 2020. Our analysis covers the period 2007-2016. By adopting a nonlinear approach, our investigation reveals two (02) endogenous inflation thresholds estimated at 8.01% and 15.46%. The positive effect on growth begins when inflation is comprised between the two thresholds. Above this interval, inflation has no effect on economic growth. Our results invalidate hence the 5% inflation threshold proposed as a convergence criterion and for supporting economic growth within the future monetary union. For a high-performing monetary union, preferably it would be better to define an inflation threshold between 8.01 and 15.46% as convergence criterion.
Author | : International Monetary |
Publisher | : International Monetary Fund |
Total Pages | : 58 |
Release | : 2022-03-02 |
Genre | : Business & Economics |
ISBN | : |
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Selected Issues