Central Bank Policies and Market Power Over the Business Cycle in Africa

This article empirically examines the impact of the business cycle on the relationship between individual central bank policies and market power. We present a representative sample of 52 African economies over the period 2006–2018. We find that monetary, macro-prudential and central bank independence policies increase market power. The study found that, in the long run, market power reacts positively to changes or adjustments made to a central bank policy framework. We show that the individual central bank’s policy framework increase market power, when interacted with business cycle.