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A Macro Model of the Credit Channel in a Currency Union Member :, The Case of Benin, Issouf Samaké

Abstract
This paper applies and extends a theoretical model built by Agénor and Montiel (2007) by exploring the effectiveness of government bonds and monetary policy in a small, open, credit-based economy with a fixed exchange rate. The model is applied to Benin, a member of a currency union, using a general equilibrium model with stochastic simulation. Model calibration replicates the historical pattern for 1996–2009. Policy experiments simulated an increase in government securities in Benin’s regional market and a cut in the reserve requirement. Simulations produced mixed results. It appears that, among other factors, excess bank liquidity lowers the effectiveness of monetary policy instruments through the credit channel and that government bonds can help mop up excess bank liquidity
Table Of Contents
Cover Page; Title Page; Copyright Page; I. Introduction; II. Background and Benchmark Model; III. Baseline Projections; IV. Policy Experiments; V. Conclusions; References; Footnotes
Language
eng
Literary Form
non fiction
Note
"August 2010."
Physical Description
1 online resource (31 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781455204144

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