Empirical Performances of Divisia versus Traditional Monetary Aggregates in BEAC and BCEAO
Date
2021-01-20
Authors
Ndjokou1, Mondjeli Mwa
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research consortium
Abstract
The purpose of the paper is to evaluate empirical performances of Divisia relative to
traditional monetary aggregates in terms of growth and inflation within the period
1992.1- 2009.4 in BEAC2
and BCEAO3
. The methodology of the paper is focused on
variance decomposition analysis derived from VAR/VECM specification to evaluate
the contribution to price level and real GDP’s fluctuations of each type of monetary
aggregate. The following conclusions are derived from the empirical analysis.
Traditional monetary aggregates have better empirical performances. In BEAC,
traditional M2 perform better in explaining price and real GDP fluctuations. The
variations of price level are mostly due to traditional monetary aggregate M1 while
simple sum monetary aggregate M2 is the best indicator of real GDP in BCEAO.
Description
Keywords
Divisia Monetary Aggregates , Simple Sum Monetary Aggregates , VAR/VECM Specification , Variance Decomposition Analysis