Household Income and Phiscal Policy Essay

1791 Words 8 Pages
NAME: FUH GEORGE CHEO

CLASS: MBA PROJECT MANAGEMENT

THE EFFECT OF MONETARY POLICY ON HOUSEHOLD CONSUPTION IN CAMEROON

ABSTRACT

The study investigates the effect of monetary policy on household consumption in Cameroon between 1980 and 2010. The objective of the the study is to find out the relationship between monetary policy on household consumption in Cameroon and to recommend policies to improve on household consumption in Cameroon. The study uses secondary time series annual data from World Bank Group Development indicators for Cameroon.

The work uses economic model showing household final consumption expenditure as a function of monetary and quasi money growth, real interest rate,
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to influence the supply of money.

However, the effectiveness of these monetary policy in accelerating household consumption in most of the CEMAC Region especially Cameroon is wanting. It is against this backdrop that this research study attempts to elucidate on how monetary policy has been influencing household consumption in Cameroon.

Research Questions

- Does monetary policy through its attributes such as real interest rate, total reserve and GNI per capita have a significant effect on household consumption in Cameroon?

- Whether money and quasi money growth has a relationship with household consumption in Cameroon?

OBJECTIVE OF THE STUDY

The main objective of the study is to investigate the effect of monetary policy on household consumption in Cameroon. Some specific objectives can be used to achieve this goal. These include

- To evaluate the role played by money and quasi money growth on household consumption in Cameroon.

- To analyze the relationship between real interest rate and household consumption in Cameroon.

- To assess the effect of GNI per capita on household consumption in Cameroon

- To recommend appropriate monetary policies to improve on household consumption in Cameroon.

Research Hypothesis

Ho: Monetary policy does not affect rural household consumption in

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