Research Article


DOI :10.26650/JEPR1082693   IUP :10.26650/JEPR1082693    Full Text (PDF)

The Econometrics of Factor Loadings and Implications for Monetary Policy in a Small Open Economy (2005- 2020) – Sierra Leone

Christopher E. S. WarburtonEmerson Abraham Jackson

In this paper, the authors explored the interaction of macroeconomic variables with some form of vague interrelationships. The relevance of factor analysis has demonstrated an existing association between manifest and latent variables in helping the researchers come out with informed and justified suggestions that are relevant to inform effective policy decisions for the central bank action in Sierra Leone. We examine the relationships among some significant manifest and latent variables in a small open economy (Sierra Leone) using time series data spanning from 2005 to 2020. Both international crude oil prices and the local currency in circulation were found to be loadable under two factors (domestic and external), while the exchange rate was observed to be loaded under the external factor. The outcome also proved that the effects of domestic and international economic shocks (sudden but temporarily disrupted) converged (dissipated) after six to eight months. The paper concludes that innovation and energy diversification are important for domestic and external stability in a small open economy.

JEL Classification : C22 , E42 , E51

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APA

Warburton, C.E., & Jackson, E.A. (2023). The Econometrics of Factor Loadings and Implications for Monetary Policy in a Small Open Economy (2005- 2020) – Sierra Leone. Journal of Economic Policy Researches, 10(1), 19-35. https://doi.org/10.26650/JEPR1082693


AMA

Warburton C E, Jackson E A. The Econometrics of Factor Loadings and Implications for Monetary Policy in a Small Open Economy (2005- 2020) – Sierra Leone. Journal of Economic Policy Researches. 2023;10(1):19-35. https://doi.org/10.26650/JEPR1082693


ABNT

Warburton, C.E.; Jackson, E.A. The Econometrics of Factor Loadings and Implications for Monetary Policy in a Small Open Economy (2005- 2020) – Sierra Leone. Journal of Economic Policy Researches, [Publisher Location], v. 10, n. 1, p. 19-35, 2023.


Chicago: Author-Date Style

Warburton, Christopher E. S., and Emerson Abraham Jackson. 2023. “The Econometrics of Factor Loadings and Implications for Monetary Policy in a Small Open Economy (2005- 2020) – Sierra Leone.” Journal of Economic Policy Researches 10, no. 1: 19-35. https://doi.org/10.26650/JEPR1082693


Chicago: Humanities Style

Warburton, Christopher E. S., and Emerson Abraham Jackson. The Econometrics of Factor Loadings and Implications for Monetary Policy in a Small Open Economy (2005- 2020) – Sierra Leone.” Journal of Economic Policy Researches 10, no. 1 (Oct. 2023): 19-35. https://doi.org/10.26650/JEPR1082693


Harvard: Australian Style

Warburton, CE & Jackson, EA 2023, 'The Econometrics of Factor Loadings and Implications for Monetary Policy in a Small Open Economy (2005- 2020) – Sierra Leone', Journal of Economic Policy Researches, vol. 10, no. 1, pp. 19-35, viewed 1 Oct. 2023, https://doi.org/10.26650/JEPR1082693


Harvard: Author-Date Style

Warburton, C.E. and Jackson, E.A. (2023) ‘The Econometrics of Factor Loadings and Implications for Monetary Policy in a Small Open Economy (2005- 2020) – Sierra Leone’, Journal of Economic Policy Researches, 10(1), pp. 19-35. https://doi.org/10.26650/JEPR1082693 (1 Oct. 2023).


MLA

Warburton, Christopher E. S., and Emerson Abraham Jackson. The Econometrics of Factor Loadings and Implications for Monetary Policy in a Small Open Economy (2005- 2020) – Sierra Leone.” Journal of Economic Policy Researches, vol. 10, no. 1, 2023, pp. 19-35. [Database Container], https://doi.org/10.26650/JEPR1082693


Vancouver

Warburton CE, Jackson EA. The Econometrics of Factor Loadings and Implications for Monetary Policy in a Small Open Economy (2005- 2020) – Sierra Leone. Journal of Economic Policy Researches [Internet]. 1 Oct. 2023 [cited 1 Oct. 2023];10(1):19-35. Available from: https://doi.org/10.26650/JEPR1082693 doi: 10.26650/JEPR1082693


ISNAD

Warburton, ChristopherE. S. - Jackson, EmersonAbraham. The Econometrics of Factor Loadings and Implications for Monetary Policy in a Small Open Economy (2005- 2020) – Sierra Leone”. Journal of Economic Policy Researches 10/1 (Oct. 2023): 19-35. https://doi.org/10.26650/JEPR1082693



TIMELINE


Submitted05.03.2022
Accepted24.06.2022
Published Online31.01.2023

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