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- Publisher
- Oxford University Press
- Copyright
- © The author 2014. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: journals.permissions@oup.com
- Subject
- Articles
- ISSN
- 0963-8024
- eISSN
- 1464-3723
- DOI
- 10.1093/jae/eju004
- Publisher site
- See Article on Publisher Site
Abstract
I propose a new approach to identifying exogenous monetary policy shocks in low-income countries with capital account restrictions. In the case of Mauritania, a domestic repatriation requirement is the institutional characteristic that allows me to establish exogeneity. Unlike in advanced countries, I find no evidence for a statistically significant impact of exogenous monetary policy shocks on bank lending. Using a unique bank-level data set on monthly balance sheets of six Mauritanian banks over the period 2006–11, I estimate structural vector autoregressions and two-stage least square panel models to demonstrate the ineffectiveness of monetary policy. Finally, I discuss how a reduction in banks' loan concentration ratios and improvements in the liquidity management framework could make monetary stimuli more effective.
Journal
Journal of African Economies – Oxford University Press
Published: Jun 28, 2014
Keywords: JEL classification E44 E52 E58 O16 O55