Student Name: Moon Oulatta
Graduate Level: PhD
Field of Study/Major: Economics
Committee Chair: Gabriel Mathy and Robert Blecker
Date of Presentation: 02/07/2018
Presentation Location: MGC 247
Time of Presentation: 1:15pm -3:15pm
Title of Dissertation: Nominal GDP Targeting: An Optimal Rule for the West African Economic and Monetary Union?
Abstract: This dissertation is specifically investigating the prospect of adopting a flexible exchange rate regime with nominal GDP as the intermediate target for the conduct of monetary policy for the members of the West African Economic and Monetary Union (WAEMU).
There are three relevant findings: (i) simulation results revealed the superiority of using nominal GDP as the intermediate target as compared to using an inflation target, a monetary aggregate target, or an exchange rate target; this result was mainly driven by the magnitude of supply shocks and the estimated slope of the short-run aggregate supply curve, which was found to be relatively elastic for the WAEMU.
(ii) McCallum's rule was found to be a useful benchmark rule for keeping nominal GDP growth on a 10 percent yearly target. (iii) Given the likelihood of encountering nominal GDP data revisions and the unavailability of aggregate nominal GDP data on a quarterly basis, we recommended to rely on additional proxies to accommodate these data issues; the nominal value of trade (exports + imports) was found to be a viable proxy, because it was extremely useful in forecasting nominal GDP and trade data could easily be accessible on a monthly basis with barely any revisions.