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THE EFFECT OF MONETARY POLICY ON ECONOMY GROWTH OF WAEMU COUNTRIES

Abstract

This paper examines the relationship between economic growth and monetary policy. Using panel cointegration structure for the eight West African Economic and Monetary Union (WAEMU) countries, we examine the impact of monetary policy on growth covering the period of 1988-2018. The results from estimation analysis showed that money supply and gross fixed capital formation had positive and significant impact on economic growth. The finding also shows that the real interest rate had significant effect on economic growth. The domestic credit to the private sector and the official exchange rate indicated a positive and statistically significant effect on economic growth.

Keywords

Monetary Policy, Growth, WAEMU, DOLS, FMOLS

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