Journal of Economics and Development Studies

Inflationary Pressions and the Effects of Optimal Coordination of Fiscal and Monetary Policies in the CEMAC Countries
Dukken Gaphi Ossouna

Abstract
The main purpose of this paper is to examine the effects of optimal monetary and fiscal policy coordination on inflationary pressures in the Central African Economic and Monetary Community (CEMAC) countries. The paper uses a panel data set of 6 CEMAC countries from 2000 to 2022 and employs the generalized moment method (GMM) for dynamic panels. The paper empirical results indicate that the optimal monetary and fiscal policy coordination index as currently stated, contributes to countering inflationary pressures. The results also show that the adoption of a policy mix in which monetary policy is expansionary while fiscal policy is restrictive increase the inflation. The paper’s finding suggest that the Bank of Central African States (BEAC) maintain the tightening of its monetary policy and work closely with member governments to ensure overall price level stability, such as commodity subsidy programs, to help alleviate inflationary pressures on consumers.

Full Text: PDF     DOI: 10.15640/jeds.v12n1a1