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1 – 2 of 2Yahuza Abdul Rahman, Anthony Kofi Osei-Fosu and Daniel Sakyi
This paper examines correlations of the underlying structural shocks and the degree of synchronization in the impulse responses of output, inflation and trade to a one standard…
Abstract
Purpose
This paper examines correlations of the underlying structural shocks and the degree of synchronization in the impulse responses of output, inflation and trade to a one standard deviation shock to non-oil commodities price index and exchange rates within the West African Monetary Zone (WAMZ) countries from 1990q1 to 2020q1.
Design/methodology/approach
This paper uses the structural vector autoregressive model to isolate the underlying structural shocks and compares them with the West African Monetary Union (WAEMU) countries.
Findings
Findings from the study suggest that correlations of underlying structural shocks are more profound in the WAEMU than in the WAMZ. Impulse responses of output to price and exchange rate shocks are more symmetric in the WAEMU than in the WAMZ. However, impulse responses of inflation to price and exchange rate shocks are symmetric in the WAMZ than in the WAEMU and responses of trade in both sub-groups are not uniform.
Practical implications
The paper concludes that the WAMZ does not constitute an Optimum Currency Area concerning the correlations of the structural shocks and output. However, it has achieved convergence in inflation and there are adequate adjustment mechanisms to shocks in the WAMZ than in the WAEMU. Therefore, the WAMZ may not suffer from joining the monetary union. Thus, economic Community of West African States may take steps to roll out the monetary union.
Originality/value
The paper examines correlations of the underlying structural shocks, impulse responses of output and inflation to shocks to commodities price and exchange rates in the WAMZ and compares them with the WAEMU.
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Keywords
Paul Owusu Takyi, Daniel Sakyi, Hadrat Yusif, Grace Nkansa Asante, Anthony Kofi Osei-Fosu and Gideon Mensah
This paper explores the implications of financial inclusion and financial development for the conduct of monetary policy in achieving price stability and economic growth in…
Abstract
Purpose
This paper explores the implications of financial inclusion and financial development for the conduct of monetary policy in achieving price stability and economic growth in sub-Saharan Africa (SSA).
Design/methodology/approach
The paper employs the system-generalized methods of moment (GMM) estimation technique using panel data spanning 2004 to 2019 and sourced from Databases of (International Monetary Fund's) IMF's Financial Access Survey (FAS), IMF's International Financial Statistics (IFS), World Bank's Global Financial Development Database (GFDD) and World Bank's World Development Indicators (WDI).
Findings
The authors find that financial inclusion has a double-edge effect in SSA. That is, it increases economic growth and lowers inflation in SSA. Furthermore, the results show that a simultaneous increase in financial inclusion and financial development have restrictive effects on economic growth. On the evidence provided, the authors conclude that financial inclusion is an important predictor of economic growth and the conduct of monetary policy in the sub-region.
Originality/value
This paper expands and contributes to the frontier of knowledge how financial inclusion is important for the conduct of monetary policy by monetary authorities in achieving its intended objectives in SSA. The paper highlights the need for ongoing enhancement of financial inclusion of many governments in the sub-region to achieving high economic growth and price stability. Thus, there is the need for policy makers to ensure that a more stringent, effective and appropriate policies and measures are put in place to enhance financial inclusion while taking into consideration the extent of financial development in SSA.
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