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Periodical article | Leiden University catalogue | WorldCat |
Title: | Money and Income Causality in Developing Economies: A Case Study of Selected Countries in Sub-Saharan Africa |
Authors: | Kalulumia, Pene Yourougou, Pierre |
Year: | 1997 |
Periodical: | Journal of African Economies |
Volume: | 6 |
Issue: | 2 |
Period: | July |
Pages: | 197-230 |
Language: | English |
Geographic term: | Subsaharan Africa |
Subjects: | monetary policy national accounts Economics and Trade |
External link: | https://jae.oxfordjournals.org/content/6/2/197.full.pdf |
Abstract: | This paper tests money-output causality and non-neutrality in five African countries: Côte d'Ivoire, Niger, Senegal, Togo, Burkina Faso, all members of the West African Monetary Union (WAMU), using quarterly data for the period 1964-1993 and applying recent robust cointegration and dynamic modelling techniques. Money balances, the consumption price index and the real exchange rate are used as long-run determinants of real output. The test results show that the trend properties of data are quite similar across these countries and generally consistent with the findings from industrial countries. The evidence indicates stronger money-output causality and non-neutrality for countries at a relatively more advanced stage in their industrial development, such as Côte d'Ivoire and Senegal. The findings also show that Côte d'Ivoire is more affected by both permanent and transitory adjustments of the real exchange rate than the other members of WAMU. The findings are consistent with the literature suggesting that monetary policy is effective in stimulating real output growth even under a fixed exchange rate regime. Bibliogr. notes, ref., sum. |