IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 8 NO. 7 2023
DOI: https://doi.org/10.56201/ijefm.v8.no7.2023.pg53.67

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The Shock Transmission Mechanism Between Monetary Policy Variables and Industrial Output in West African Countries

OWOEYE Taiwo (Ph.D), OLALERE Sunday Shina (Ph.D) and AKOJEDE Ololade Abigail

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Abstract

The study investigated the shock transmission mechanism between monetary policy variable and industrial output in West African Countries between 1980 and 2019. In this study, West African Countries are grouped into two; Anglophone and Francophone. The monetary policy variables employed in the study are real prices exchange rate money supply, monetary policy rate and interbank rate. The study made use of Panel VAR as an estimation technique in order to examine the shock transmission mechanism. The findings showed that, industrial out negatively responded to the shock from monetary policy variables among English speaking in West African Countries while industrial output sector responded positively to shock from the monetary policy variables in French speaking countries within West Africa. In line with the finding of this study, it is therefore recommended that, monetary authorities in West African nations should formulate appropriate monetary policies in order to increase industrial output growth in West African countries.

keywords:

Shock Transmission Mechanism, Monetary Policy Variables, Industrial Sector, Panel VAR and West Africa

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References:

Bhuiyan, R. (2008). Monetary transmission mechanism in a small open economy: A Bayesian
structural VAR approach (No. 1183). Queen's Economics Department Working Paper.

Bolnick, B. (1991). Weak links in the monetary transmission mechanism: The case of Malawi,
ODI/HIID Conference on Improving Monetary Policy in Africa and Asia, unpubished
manuscript.

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