The empirical analyses of exchange rate and monetary policies in West Africa

2015 Fiscal Year Final Research Report

• Project/Area Number: 25380415
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Multi-year Fund
• Section: 一般
• Research Field: Money/ Finance
• Research Institution: Konan University
• Principal Investigator: Sugimoto Kimiko 甲南大学, マネジメント創造学部, 准教授 (70351434)
• Project Period (FY): 2013-04-01 – 2016-03-31
• Keywords: 金融政策 / 為替制度 / 西アフリカ / 株式市場 / 資本流入 / 地域統合 / スピルオーバー分析

Outline of Final Research Achievements

This research investigates what kind of combination of monetary policy and exchange rate regime each country should choose in West Africa to create a regional common currency area. At this stage, each country has a different combination of monetary policy and exchange rate regime. The empirical results indicate that there is no regional common combination which is beneficial for all member countries to eliminate the negative impacts of the external shocks facing their economies. To cope with positive shocks to inflation, the inflation targeting (chosen by Ghana) seems to dominate the currency board regime (chosen by the CFA franc zone members) as a strategy.
Moreover, the empirical results show that African stock markets are most severely affected by spillovers from global markets. Thus, the creation of a regional common stock exchanges in West Africa turns out to be desirable to mitigate global financial stability risks.

Free Research Field

国際金融