TITLE:
How Do Business and Credit Cycles Interact in EMCCA Countries?
AUTHORS:
Pamphile Mezui-Mbeng
KEYWORDS:
Credit Cycle; Business Cycle; Pass-Band Filter; Co-Movements; Concordance Indices
JOURNAL NAME:
Modern Economy,
Vol.4 No.4,
April
30,
2013
ABSTRACT: This article analyzes potential
interactions between cyclic fluctuations in credit and activity in countries of
the Economic and Monetary Community of Central Africa (EMCCA). Cycles are
extracted by using a pass-band filter, then characterized over the period
1960-2008 according to the Bry and Boshan algorithm. Co-movements and
concordance analysis establish that credit is procyclical in the EMCCA
countries. Cointegration and causality tests specify interactions between the
both cycles within countries. Indeed, in Chad credit cycle causes activity
cycle; in Gabon and Congo, a feedback effect is observed; in Cameroon and CAR
causality seems less obvious. Finally, results reveal specificities in banks
behavior towards the financing of activity in EMCCA area.