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

By Anja Shortland and David Stasavage


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

Topics: HG Finance, JF Political institutions (General)
Year: 2004
DOI identifier: 10.1093/jae
OAI identifier:
Provided by: LSE Research Online
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