Empirical Performances of Divisia versus Traditional Monetary Aggregates in BEAC and BCEAO
Ndjokou1, Mondjeli Mwa
African Economic Research consortium
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.
Divisia Monetary Aggregates , Simple Sum Monetary Aggregates , VAR/VECM Specification , Variance Decomposition Analysis