Description

Using a consistent dataset and methodology for all eight member countries of the West African Economic and Monetary Union (WAEMU) from 1994 to 2009, this paper provides evidence of the two major channels for real effects of inflation: inflation uncertainty and relative price variability. In line with theory and most evidence for advanced and emerging market economies, higher inflation increases inflation uncertainty and relative price variability in all WAEMU countries. However, the pattern, magnitude and timing of these two channels vary considerably by country. The findings raise several policy issues for future research.

Taxonomy

Banks and banking , Central banks , Economic policy , Financial institutions and markets , Inflation , Monetary policy

More publications in this series: Working Papers

More publications by: Kerstin Gerling ; Carlos Fernandez Valdovinos