Global commodity prices, economic activity and monetary policy: The relevance of China

2014 ◽  
Vol 42 ◽  
pp. 1-9 ◽  
Author(s):  
Philipp Klotz ◽  
Tsoyu Calvin Lin ◽  
Shih-Hsun Hsu
Keyword(s):  
Monetary Policy ◽  
Economic Activity ◽  
Commodity Prices

scholarly journals The monetary transmission mechanism in Brazil: evidence from a var analysis

2008 ◽  
Vol 38 (1) ◽  
pp. 7-30 ◽  
Author(s):  
Viviane Luporini
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Economic Activity ◽  
Commodity Prices ◽  
Transmission Mechanism ◽  
Monetary Transmission ◽  
Time Interval ◽  
Monetary Shocks ◽  
Real Gdp ◽  
The Exchange Rate

This article presents evidence on the interest channel of the monetary policy for the Brazilian economy of the 1990s analyzing the effects of an unexpected change in the baseline interest rate on output, prices and the exchange rate in a vector autoregression system. Our main results are: a) a tightening in the monetary policy affects economic activity immediately, reducing the rate of growth of real GDP; b) the exchange rate and prices are affected only after a time interval, with inflation assuming a downward trend only two months after the monetary shock; c) results do not change when the specification is controlled for international conditions, commodity prices or other measures of inflation and economic activity; d) monetary shocks have a significant impact on the volatility of output and inflation in the benchmark model e) monetary shocks have a significant impact on the volatility of the debt/GDP ratio in the control-model.

Economic effects of monetary policy in Russia: What do large datasets tell us?

2020 ◽  
pp. 31-53 ◽  
Author(s):  
Anna A. Pestova ◽  
Natalia A. Rostova
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Interest Rates ◽  
Economic Activity ◽  
Global Financial Crisis ◽  
Exchange Rate Regime ◽  
Aggregate Demand ◽  
Economic Effects ◽  
Theoretical Concepts ◽  
Empirical Estimates

Is the Bank of Russia able to control inflation and, at the same time, manage aggregate demand using its interest rate instruments? In other words, are empirical estimates of the effects of monetary policy in Russia consistent with the theoretical concepts and experience of advanced economies? This paper is aimed at addressing these issues. Unlike previous research, we employ “big data” — a large dataset of macroeconomic and financial data — to estimate the effects of monetary policy in Russia. We focus exclusively on the period after the 2008—2009 global financial crisis when the Bank of Russia announced the abandoning of its fixed ruble exchange rate regime and started to gradually transit to an interest rate management. Our estimation results do not confirm standard responses of key economic activity and price variables to tightening of monetary policy. Specifically, our estimates do not reveal a statistically significant restraining effect of the Bank of Russia’s policy of high interest rates on inflation in recent years. At the same time, we find a significant deteriorating effect of the monetary tightening on economic activity indicators: according to our conservative estimates, each of the key rate increases occurred in March and December 2014 had led to a decrease in the industrial production index by about 0.2 percentage points within a year.

Estimation of economic specialization of Ukrainian regions in the context of global trends

2019 ◽  
pp. 24-31
Author(s):  
Svitlana Ishchuk ◽  
Lyubomyr Sozanskyy
Keyword(s):  
National Economy ◽  
Economic Activity ◽  
Commodity Prices ◽  
Value Added ◽  
High Tech ◽  
Agricultural Commodity ◽  
Macroeconomic Factors ◽  
Gross Value Added ◽  
Its Regions ◽  
Economic Specialization

The scale and deep heterogeneity of the national economy of Ukraine in the regional context make the relevance of scientific research in this thematic area. The purpose of the article is to determine the economic specialization of the regions of Ukraine by key economic activities contributing to the formation of gross value added, as well as outlining the potential risks to the national economy, taking into account the situation on world commodity markets. The results of the research showed that one of the consequences of the unstable dynamics of industrial production in Ukraine under the influence of geopolitical and macroeconomic factors is the reduction of industrial specialization of the economy of a number of Ukrainian regions. Thus, in 2017 the manufacturing was the leading economic activity (with the highest share in the gross value added created) in 11 regions, compared to 15 in 2012. So Poltava, Donetsk, Dnipropetrovsk and Zaporizhzhya regions are considered to be “highly industrial”. At the same time, the agrarian specialization of the economy of Ukraine and its regions deepened – in 2017 agriculture became the leading type of economic activity in 11 regions (compared to 7 in 2012). The most “agrarian” in Ukraine (with a share of agriculture in gross value added over 30%) in 2017 became the Kherson, Kirovohrad and Khmelnytsky regions. Increasing the level of “agrarianization” of the national economy in the context of volatility of agricultural commodity prices on the world markets poses significant risks for the socio-economic development of Ukraine and its regions. These risks are exacerbated by the high amplitude of fluctuations in the volume and structure of domestic agricultural products and the low degree of processing of raw materials. To improve the structure of domestic commodity exports (in the direction of increasing its share of products with a higher degree of processing) and to deepen its diversification, a number of measures should be carried out aimed at stimulating export activity of enterprises (industrial and agro-industrial), carrying out technical and technological re-equipment of industrial and export production bases, creation of new high-tech industries on the basis of the implementation of powerful innovation and investment projects.

scholarly journals The impact of Musharakah financing on the monetary policy in the Islamic economy

2018 ◽  
Vol 3 (3/4) ◽  
pp. 139-152
Author(s):  
Hatem Adela
Keyword(s):  
Economic Theory ◽  
Monetary Policy ◽  
Interest Rate ◽  
Economic Activity ◽  
Methodological Framework ◽  
Mathematical Methods ◽  
Content Type ◽  
Return Rates ◽  
The Interest Rate ◽  
The Impact

Purpose This paper aims to contribute to formulating the methodological framework for a paradigm of Islamic economics, using the development of the conventional economics, theoretical and mathematical methods. Design/methodology/approach The study based on the inductive and mathematical methods to contribute to economic theory within the methodological framework for Islamic Economics, by using the return rate of Musharakah rather than the interest rate in influence the economic activity and monetary policy. Findings Via replacement, the concept of the interest rate by the return rates of Musharakah. It concludes that the central bank can control the monetary policy, economic activity and the efficient allocation of resources by using the return rates of Musharakah through the framework of Islamic economy. Practical/implications The study is a contribution to formulate the methodological framework for a paradigm of Islamic economics, where it investigates the impact of return rates of Musharakah on the money market and monetary policy, by the mathematical methods used in the conventional economy. Also, the study illustrates the importance of further studies that examine the methodological framework for Islamic Economics. Originality/value The study aims to contribute to formulating the Islamic economic theory, through the return rate of Musharakah financing instead of the interest rate, and its effectiveness of the monetary policy. As well as reformulating the concepts of the investment function, the present value and the marginal efficiency rate of investment according to the Islamic economy approach.

Monetary Policy and Oil Prices

2011 ◽  
Vol 11 (3) ◽  
pp. 1850232
Author(s):  
Mehdi S. Monadjemi
Keyword(s):  
Monetary Policy ◽  
International Trade ◽  
Exchange Rate ◽  
Inflation Targeting ◽  
Commodity Prices ◽  
Oil Prices ◽  
Central Banks ◽  
Trade Shocks ◽  
The Exchange Rate

Because of volatility, commodity prices are excluded from the CPI when inflation targeting is exercised. Rising commodity prices contribute to inflation but central banks show no reaction since the CPI does not register rise in prices. Frankel (2006) argues that monetary policy should consider the price of important export commodities such as oil, in oil exporting countries. He maintains that by doing so, central banks are able to benefit from the fluctuations of the exchange rate in the presence of a negative international trade shocks. Central banks cannot benefit from the fluctuation of the exchange rate if inflation targeting is the strategy for conducting monetary policy.

Monetary Policy and the Future of Central Banking

2021 ◽  
pp. 9-14
Author(s):  
Mitsuhiro Furusawa
Keyword(s):  
Monetary Policy ◽  
World War Ii ◽  
Interest Rates ◽  
Global Economy ◽  
Commodity Prices ◽  
Central Banking ◽  
African Countries ◽  
Advanced Economies ◽  
Policy Frameworks ◽  
Forward Looking

The chapter highlights the state of monetary policy in Africa and explores the challenges that central banks face as they address the increasingly complex forces at work in the global economy. It sequences the evolution of monetary policy from the time of World War II under the Bretton Woods system to the more recent forward-looking monetary policy in advanced economies and relates it to influencing the evolution of monetary policy frameworks in Africa. Some challenges affecting African countries are identified, including the collapse of commodity prices, persistent high interest rates spreads, and limitations of high frequency data that constrain monetary authorities’ abilities to take corrective actions in a timely manner. The chapter concludes by providing seven principles towards increasing the effectiveness of monetary policy for countries seeking to move towards forward-looking monetary policy frameworks.

scholarly journals An Empirical Analysis of Macroeconomic Variability on the Ghanaian Stock Market: A Vector Autoregression Approach

2016 ◽  
Vol 3 (2) ◽  
pp. 49
Author(s):  
Beverly Acquah
Keyword(s):  
Stock Market ◽  
Interest Rates ◽  
Stock Prices ◽  
Economic Activity ◽  
Price Index ◽  
Vector Autoregression ◽  
Negative Relationship ◽  
Commodity Prices ◽  
Commodity Price ◽  
Macroeconomic Indicators

This study investigates the dynamic interrelationships among stock prices and selected macroeconomic indicators namely; economic activity, global commodity price index, inflation and interest rates in Ghana. By employing a Vector Autoregression (VAR) Model, the empirical results reveal that stock prices depreciate with an increase in global commodity prices and interest rates indicating a negative relationship. On the other hand, stock prices appreciate with an increase in inflation and economic activity indicating a positive relationship. Examining stock market variability on the selected macroeconomic variables also showed that inflation and interest rates respond negatively to changes in asset prices while the stock market itself is not found to be a leading indicator for economic activity. The evidence suggests that the listed equities on the GSE are a hedge against inflation in Ghana. Increasing economic activity over time is advantageous for the Ghanaian stock market.

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