COMESA Monetary Institute (CMI) organized a training course on “Modeling Transmission Mechanism of Monetary Policy and Panel Data Modeling” from 2-13 June 2014 in Nairobi, Kenya.
The training was attended by 20 participants from 10 COMESA member countries. Key objectives of the training included the enhancement of participants understanding of modeling transmission mechanism of monetary policy and provide hands-on training on modeling of panel data.
Further the training was aimed at contributing to knowledge sharing and networking between member states on the designing of models for transmission mechanism of monetary policy and using panel data econometrics for implementation of better informed policies.
The training followed the resolution of the 19th Meeting of the COMESA Committee of Governors of Central Banks, which was held in Lilongwe, Malawi in November 2013. During the meeting, COMESA Monetary Institute (CMI) was instructed to organize a training course on “Modeling Transmission Mechanism of Monetary Policy and Panel Data Modeling”.
When opening the training, Mr. Ibrahim A. Zeidy, Director of the COMESA Monetary Institute, underscored that COMESA region needs growth enhancing structural transformation that will help achieve the Millennium Development Goals.
In this regard, he said capacity building in transmission mechanism of monetary policy and panel data modeling is crucial to ensure macroeconomic convergence, and to harmonize development policies in the COMESA region.
“Panel modeling is particularly instrumental in underpinning the extent of symmetry or asymmetry of shocks across countries and thereby in the examination of the scope of the integration agenda”, he said.
Panel data econometrics enables applied macroeconomic researchers to work with combined cross section and time series region wide data. It will, therefore, enable to investigate the evidence across the continent or across the specific regional block. This is particularly true when the time span of data for a particular country is limited. Such cross country analysis is also useful when an issue is ambiguous and the researcher wants to know the evidence elsewhere in the continent or in a particular region.
Mr Zeidy observed that knowledge of transmission mechanism of monetary policy is imperative for effective monetary policy management which encompasses setting consistent policy objectives and deploying policy instruments for the attainment and sustenance of policy objectives.
“It is widely accepted by economists that timely and correctly measured monetary policy action is a crucial element of the effectiveness of monetary policy management”, Mr Zeidy said