Monetary aggregates and price stability in the BEAC zone



The main objective of this study is to evaluate the relevance of the use of monetary aggregates to achieve price stability in the BEAC zone. More precisely, the aim of the study is to examine the properties of stability, controllability and information content of monetary aggregates within the periods 1985- 2005 and 1992- 2005 using quarterly data. The econometric investigation leads to the following results: (a) the stability of monetary aggregates of the BEAC zone is verified; (b) the hypothesis of controllability of monetary aggregates is confirmed; (c) the contribution of monetary aggregates to the explanation of inflation is weak in short run and shows some improvement in the long run.

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