One of the most important goals for all countries is to maintain sustainable growth with low inflation. As a result, each government is fighting high inflation. To stabilize the rate of inflation, it is interesting to study its different sources and monetary policy has one. This study has two objectives: the first objective is to analyze the effect of monetary policy on inflation and the second objective is to examine the nature of the relationship between money supply and inflation in Cameroon. This study uses annual time series data from 1980 to 2016. Johansen's cointegration test was used to find the relationship between the money supply and inflation. The ARDL estimation method was used to analyze the effect of the money supply on inflation in Cameroon and the Toda and Yamamoto's causality test was used to test the causality between money supply and inflation. The results show that, there is a long-run equilibrium relationship between the money supply and inflation; the money supply has a positive and significant effect on inflation in Cameroon and there is one-way causality from money supply to inflation. This study shows that inflation has a monetary source in Cameroon. Thus, monetary policy should be planned to maintain price stability by controlling the growth of the money supply in the Cameroonian economy.
| Published in | International Journal of Economics, Finance and Management Sciences (Volume 6, Issue 5) |
| DOI | 10.11648/j.ijefm.20180605.11 |
| Page(s) | 200-207 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2018. Published by Science Publishing Group |
Monetary Policy, Inflation, ARDL, Toda and Yamamoto Causality Test, Cameroon
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APA Style
Tékam Oumbé Honoré. (2018). Monetary Policy and Inflation: Empirical Evidence from Cameroon. International Journal of Economics, Finance and Management Sciences, 6(5), 200-207. https://doi.org/10.11648/j.ijefm.20180605.11
ACS Style
Tékam Oumbé Honoré. Monetary Policy and Inflation: Empirical Evidence from Cameroon. Int. J. Econ. Finance Manag. Sci. 2018, 6(5), 200-207. doi: 10.11648/j.ijefm.20180605.11
AMA Style
Tékam Oumbé Honoré. Monetary Policy and Inflation: Empirical Evidence from Cameroon. Int J Econ Finance Manag Sci. 2018;6(5):200-207. doi: 10.11648/j.ijefm.20180605.11
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Download@article{10.11648/j.ijefm.20180605.11,
author = {Tékam Oumbé Honoré},
title = {Monetary Policy and Inflation: Empirical Evidence from Cameroon},
journal = {International Journal of Economics, Finance and Management Sciences},
volume = {6},
number = {5},
pages = {200-207},
doi = {10.11648/j.ijefm.20180605.11},
url = {https://doi.org/10.11648/j.ijefm.20180605.11},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20180605.11},
abstract = {One of the most important goals for all countries is to maintain sustainable growth with low inflation. As a result, each government is fighting high inflation. To stabilize the rate of inflation, it is interesting to study its different sources and monetary policy has one. This study has two objectives: the first objective is to analyze the effect of monetary policy on inflation and the second objective is to examine the nature of the relationship between money supply and inflation in Cameroon. This study uses annual time series data from 1980 to 2016. Johansen's cointegration test was used to find the relationship between the money supply and inflation. The ARDL estimation method was used to analyze the effect of the money supply on inflation in Cameroon and the Toda and Yamamoto's causality test was used to test the causality between money supply and inflation. The results show that, there is a long-run equilibrium relationship between the money supply and inflation; the money supply has a positive and significant effect on inflation in Cameroon and there is one-way causality from money supply to inflation. This study shows that inflation has a monetary source in Cameroon. Thus, monetary policy should be planned to maintain price stability by controlling the growth of the money supply in the Cameroonian economy.},
year = {2018}
}
TY - JOUR T1 - Monetary Policy and Inflation: Empirical Evidence from Cameroon AU - Tékam Oumbé Honoré Y1 - 2018/10/29 PY - 2018 N1 - https://doi.org/10.11648/j.ijefm.20180605.11 DO - 10.11648/j.ijefm.20180605.11 T2 - International Journal of Economics, Finance and Management Sciences JF - International Journal of Economics, Finance and Management Sciences JO - International Journal of Economics, Finance and Management Sciences SP - 200 EP - 207 PB - Science Publishing Group SN - 2326-9561 UR - https://doi.org/10.11648/j.ijefm.20180605.11 AB - One of the most important goals for all countries is to maintain sustainable growth with low inflation. As a result, each government is fighting high inflation. To stabilize the rate of inflation, it is interesting to study its different sources and monetary policy has one. This study has two objectives: the first objective is to analyze the effect of monetary policy on inflation and the second objective is to examine the nature of the relationship between money supply and inflation in Cameroon. This study uses annual time series data from 1980 to 2016. Johansen's cointegration test was used to find the relationship between the money supply and inflation. The ARDL estimation method was used to analyze the effect of the money supply on inflation in Cameroon and the Toda and Yamamoto's causality test was used to test the causality between money supply and inflation. The results show that, there is a long-run equilibrium relationship between the money supply and inflation; the money supply has a positive and significant effect on inflation in Cameroon and there is one-way causality from money supply to inflation. This study shows that inflation has a monetary source in Cameroon. Thus, monetary policy should be planned to maintain price stability by controlling the growth of the money supply in the Cameroonian economy. VL - 6 IS - 5 ER -
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