• Alain K. MALATA Economics Department, Faculty of Economics and Business University of Kinshasa, Congo
  • Christian P. PINSHI Economics Department, Faculty of Economics and Business University of Kinshasa, Congo


The Central Bank of Congo (BCC) reduced the policy rate in response to the uncertain effects of the coronavirus. The impact of the pandemic on the economy is still uncertain and depends on many factors. Using the Bayesian technique of the VAR model we notice that cutting the policy rate would not help the economy to cope with the consequences of COVID-19, we should rethink other tactics and strategies, such as a good communication strategy and / or try unconventional monetary policy measures. However, coordination with fiscal policy is a driver key in blurring the effects of the coronavirus crisis[1].


[1]Opinions expressed on this paper do not necessarily reflect the views of the Central Bank of Congo.


[1] Baker, S., Bloom, N., Davis, S.J., Terry, S.J. 2020. COVID-Induced Economic Uncertainty. April. https://www.nber.org/papers/w26983
[2] Baker, S.R., Farrokhina, R.A., Meyer, S., Pagel, M., Yannelis, C. 2020. How does household spending respond to an epidemic? Consumption during the 2020 COVID-19 pandemic. National Bureau of Economic Research, NBER Working Paper 26949. https://ideas.repec.org/p/nbr/nberwo/26949.html
[3] Barro, R., Ursua, J., Weng, J. 2020. The coronavirus and the great in pandemic influenza. lessons from the “Spanish Flu” for the coronavirus’s potential effects on mortality and economic activity. National Bureau of Economic Research, NBER Working Paper 26866, April. https://ideas.repec.org/p/nbr/nberwo/26866.html
[4] Bekaert, G., Hoerova, M., Lo Duca, M. 2010. Risk, uncertainty and monetary policy. National Bureau of Economic Research, Working Paper 16397. https://econpapers.repec.org/paper/nbrnberwo/16397.htm
[5] Christensen, J.H., Gamble, J.M., Zhu, S. 2020. Coronavirus and risk of deflation. FRBSF Economic Letter, https://www.frbsf.org/economic-research/publications/economic-letter/2020/may/coronavirus-and-risk-of-deflation/
[6] Cúrdia, V. 2020 Mitigating COVID-19 Effects with Conventional Monetary Policy. FRBSF Economic Letter 2020-09, April. https://ideas.repec.org/a/fip/fedfel/87776.html
[7] Delle Chiaie, S. 2009. Monetary policy and potential output uncertainty a quantitative assessment. 2009. Working Paper Series no 1130, December. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1520350
[8] Dietrich, A.M., Kuester, K., Müller, G.J., Raphael, S.S. 2020. News and uncertainty about COVID-19: Survey evidence and short-run economic impact. Federal Reserve Bank of Cleveland, Working Paper No. 20-12. https://doi.org/10.26509/frbc-wp-202012.
[9] Grigoli, F., Herman, A., Swiston, A., Di Bella, G. 2015. Output gap uncertainty and real-time monetary policy. Russian Journal of Economics, vol.1, 329-358. DOI: https://doi.org/10.1016/j.ruje.2016.02.001
[10] Huidrom, R., Kose, M.A., Lim, J.J., Ohnsorge, F.L. 2019. Why do Fiscal Multipliers Depend on Fiscal Positions? World Bank Group, Policy Research Working Paper 8784, March. https://cama.crawford.anu.edu.au/sites/default/files/publication/cama_crawford_anu_edu_au/2019-03/28_2019_huidrom_kose_lim_ohnsorge.pdf
[11] Jordà, O., Singh, S.R., Taylor, A.M. 2020. Longer-Run Economic Consequences of Pandemics. Federal Reserve Bank of San Francisco Working Paper. https://ideas.repec.org/p/fip/fedfwp/87696.html
[12] Leduc, S., Liu, Z.2012. Uncertainty, unemployment, and inflation. FRBSF Economic Letter 2012-28, September. https://www.researchgate.net/publication/232736012_Uncertainty_Unemployment_and_Inflation
[13] Leduc, S., Liu, Z. 2020. The Uncertainty Channel of the Coronavirus. FRBSF Economic Letter 2020-07. https://www.frbsf.org/economic-research/publications/economic-letter/2020/march/uncertainty-channel-of-coronavirus/
[14] Leitemo, K., Soderstrom, U. 2001. Simple monetary policy rules and exchange rate uncertainty. Sveriges Riksbank Working Paper Series no. 122. https://www.econstor.eu/bitstream/10419/82453/1/wp_122.pdf
[15] Lzetzki, E., Mendoza, E.G., Végh, A.C. 2010. How big (small?) are fiscal multipliers? University of Maryland and NBER. https://www.imf.org/external/pubs/ft/wp/2011/wp1152.pdf
[16] Ma, C., Rogers, J., Zhou, S. 2020. Global economic and financial effects of 21st Century pandemics and epidemics. Covid Economics, vol.5, 6-74. https://cepr.org/content/covid-economics-vetted-and-real-time-papers-0#block-block-9
[17] Pinshi, C.P. 2020a. What impact does COVID-19 have on the Congolese economy and international trade?, hal-02864308, June. https://hal.archives-ouvertes.fr/hal-02864308/document
[18] Pinshi, C.P. 2020b. Monetary policy in DR. Congo: Learning about communication and expectations. MPRA Paper no. 100262, may. https://mpra.ub.uni-muenchen.de/100262/
How to Cite
MALATA, Alain K.; PINSHI, Christian P.. FADING THE EFFECTS OF CORONAVIRUS WITH MONETARY POLICY. Theoretical and Practical Research in the Economic Fields, [S.l.], v. 11, n. 2, p. 105-110, dec. 2020. ISSN 2068-7710. Available at: <https://journals.aserspublishing.eu/tpref/article/view/5777>. Date accessed: 11 may 2021. doi: https://doi.org/10.14505//tpref.v11.2(22).03.