Monetary Policy in Sub-Saharan Africa
Monetary Policy in Sub-Saharan Africa
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Abstract
Having broadly stabilized inflation over the past two decades, many policymakers in sub-Saharan Africa are now asking more of their monetary policy frameworks. They are looking to avoid policy misalignments and respond appropriately to both domestic and external shocks, including swings in fiscal policy and spikes in food and export prices. In many cases they are finding current regimes—often characterized as ‘money targeting’—lacking, with opaque and sometimes inconsistent objectives, inadequate transmission of policy to the economy, and difficulties in responding to supply shocks. At the same time, little existing research on monetary policy is targeted to low-income countries. What do we know about the empirics of monetary transmission in low-income countries? (How) Does monetary policy work in countries characterized by a huge share of food in consumption, underdeveloped financial markets, and opaque policy regimes? (How) Can we use methods largely derived in advanced countries to answer these questions? And (how) can we use the results to guide policymakers? This book draws on years of research and practice at the IMF and in central banks from the region to shed empirical and theoretical light on these questions and to provide practical tools and policy guidance. A key feature of the book is the application of dynamic general equilibrium models, suitably adapted to reflect key features of low-income countries, for the analysis of monetary policy in sub-Saharan African countries.
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Front Matter
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1
Monetary Policy in Sub-Saharan Africa
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2
Inflation Targeting in Uganda: What Lessons Can We Learn from Five Years of Experience?
Martin Brownbridge andLouis Kasekende
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Part I Empirical Evidence
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Part II Analytical Issues Relevant for Monetary Policy Analysis in Sub-Saharan Africa
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7
Introduction to Part II
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8
On the Role of Money Targets in the Monetary Policy Framework in SSA: Insights from a New Keynesian Model with Incomplete Information
Andrew Berg and others
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9
Implementation Errors and Incomplete Information: Implications for the Effects of Monetary Policy in Low-Income Countries
Rafael Portillo and others
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10
On the First-Round Effects of International Food Price Shocks
Rafael Portillo andLuis-Felipe Zanna
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11
Implications of Food Subsistence for Monetary Policy and Inflation
Rafael Portillo and others
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12
The Short-Run Macroeconomics of Aid Inflows: Understanding the Interaction of Fiscal and International Reserve Policy
Andrew Berg and others
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13
Modelling Sterilized Interventions and Balance Sheet Effects of Monetary Policy in a New Keynesian Framework
Jaromir Benes and others
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7
Introduction to Part II
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Part III Applied Models for Policy Analysis and Forecasting in SSA: Selected Case Studies
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14
Introduction to Part III
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15
On the Sources of Inflation in Kenya: A Model-Based Approach
Michal Andrle and others
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16
Do Money Targets Matter for Monetary Policy in Kenya?
Michal Andrle and others
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17
Monetary Policy in Low-Income Countries in the Face of the Global Crisis: A Structural Analysis
Alfredo Baldini and others
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18
Introducing a Semi-Structural Macroeconomic Model for Rwanda
Luisa Charry and others
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19
Inflation Forecast Targeting in a Low-Income Country: The Case of Ghana
Ali Alichi and others
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20
A Structural Analysis of the Determinants of Inflation in the CEMAC Region
Rafael Portillo
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14
Introduction to Part III
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End Matter
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