Is Monetary Policy Effective When Credit is Low?.

Format:

Book

Government document

Author/Creator:

International Monetary Fund.

Series:

IMF Working Papers; Working Paper ; No. 2008/288

IMF working paper ; WP/08/288

IMF Working Papers

Language:

English

Subjects (All):

Monetary policy--Econometric models.

Monetary policy.

Credit--Econometric models.

Credit.

Inflation (Finance)--Econometric models.

Inflation (Finance).

Physical Description:

1 online resource (19 pages) : illustrations (some color).

Edition:

1st ed.

Place of Publication:

Washington, D.C. : International Monetary Fund, 2008.

Language Note:

English

Summary:

Monetary policy, at least in part, operates through both an interest rate and credit channel. The question arises, therefore, whether monetary policy is a less potent a device in affecting output and inflation in countries that have low levels of credit and where investment and consumption are not financed by borrowing in local currency. This paper employs a Panel Vector Auto Regression approach to examine the empirical evidence in a broad sample of emerging market countries. The data suggests that the effectiveness of changes in policy interest rates in influencing the path of inflation appear to be unrelated to the level of credit and that, instead, the willingness to allow exchange rate flexibility is a far more important determining factor.

Contents:

Intro

Contents

I. Background

II. The Methodological Approach

III. A Country-by-Country Analysis

IV. A Panel Approach

V. The Importance of The Exchange Rate Regime

VI. Conclusions

Tables

1. Panel VAR: Wald Test Results

2. Panel VAR: Floating Exchange Rate: Wald Test Results

Figures

1. Selected Impulse Response Functions of a One Standard Deviation Shock to Interest Rate

2. Cross-Country Impact on Inflation of a 1 Percent Shock to Interest Rates

3. Panel VAR: Impulse Response Function of a One Standard Deviation Shock to Interest Rates

4. Panel VAR: Impulse Response Function of a Shock to Interest Rates

5. Panel VAR: Impulse Response Function of a Shock to Interest Rates

References

Annexes

I. Description of the Data

II. Monetary Policy Regimes

III. Exchange Rate Regimes.

Notes:

Bibliographic Level Mode of Issuance: Monograph

Includes bibliographical references.

Description based on online resource; title from PDF front page (ebrary, viewed February 27, 2014).

ISBN:

9786612842238

9781462369911

146236991X

9781451996357

1451996357

9781451871463

1451871465

9781282842236

1282842234

OCLC:

762251491