Monetary Policy Interdependency in Fisher Effect: A Comparative Evidence

Olatunji Abdul Shobande* (Corresponding Author), Oladimeji Tomiwa Shodipe

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

7 Citations (Scopus)
8 Downloads (Pure)


In this paper, we examine the ability of Fisher effect to describe the subjective behaviour of monetary policy responses for nations constrained by global factors. We developed and estimated a simple DSGE model for appraising the consequence of an integrated financial market predictor on national monetary policy response in Africa’s largest economies – Nigeria and South Africa. The paper integrated the theoretical intuition of the famous Fisher effect on the New Keynesian DSGE model with global predictors to describe national monetary policy response as it influence domestic financial variables and macroeconomic fundamentals. Simulations show that the existence of global factors threatens the abilities of national monetary policy to predict financial variables and macroeconomic fundamentals in their economies.
Original languageEnglish
Pages (from-to)203-226
Number of pages24
JournalJournal of Central Banking Theory and Practice
Issue number1
Early online date26 Jan 2021
Publication statusPublished - 26 Jan 2021


  • DSGE model
  • Macroeconomic forecast
  • Monetary policy
  • Fisher effect
  • Africa


Dive into the research topics of 'Monetary Policy Interdependency in Fisher Effect: A Comparative Evidence'. Together they form a unique fingerprint.

Cite this