THE IMPACT OF TRADE CONFLICT ON MONETARY POLICY IN TARGET ECONOMIES

2020 ◽  
pp. 1-24
Author(s):  
XIN-XIN ZHAO ◽  
JUN WEN ◽  
SUMILA WANAGURU ◽  
CHUN-PING CHANG
Keyword(s):  
Monetary Policy ◽  
Economic Analysis ◽  
Oecd Countries ◽  
Transition Countries ◽  
Domestic Economy ◽  
Monetary Policies ◽  
Policy Makers ◽  
The Impact ◽  
Shed Light

The nexus between trade conflict and monetary policy is of great importance in international political and economic analysis. By employing data from a panel of global countries covering the period 2000–2015, this paper empirically analyzes the impact of trade conflict on monetary policy and how it works. We document the evidence that trade conflict has caused targeted countries to implement loose monetary policy. We also find that the impact of trade conflict is not only effective in the current year, but also continues in the next five years. In addition, we show that the significant impact on monetary policy is manifested in non-OECD countries and transition countries but not in OECD countries and non-transition countries. Consequently, we believe our findings should shed light on those policy makers in target countries, who can hopefully prepare for potential trade conflict and avoid similar disputes from interfering with the effectiveness of monetary policies in the domestic economy by providing practical currency and valuation strategies.

scholarly journals Impacts of Monetary Policy on Commercial Banks’ Profits: The Case of Vietnam

2017 ◽  
Vol 13 (8) ◽  
pp. 32
Author(s):  
Thanh Nhan Nguyen ◽  
Ngoc Huong Vu ◽  
Ha Thu Le
Keyword(s):  
Monetary Policy ◽  
Commercial Banks ◽  
Positive Impact ◽  
Monetary Policies ◽  
Significance Level ◽  
Doing Business ◽  
Panel Data Regression ◽  
Banking Market ◽  
Data Regression ◽  
The Impact

This paper mainly concentrates on examining the impact of monetary policy on commercial banks’ profit in Vietnam by using panel data regression. In our study, the data is collected from 20 commercial banks which were doing business in Vietnam’s banking market, ranging from 2007 to 2014 in annually frequency. Monetary base (MB), discount rate (DIS) and required reserve ratio (RRR) are used as proxies for monetary policy. Profit before tax (PROFIT) is used to represent commercial banks’ performance. The results show that there is a positive relationship between banks’ profits and monetary policies. Among those chosen variables representing SBV’s monetary policy, only MB has a significant positive impact on bank’s profit at the significance level of 10%. On this premise, the study recommends that MB should be one of the variables in the center of being concerned in the SBV’s policies regarding the banking performance and stability.

The Impact of US Monetary Policy and Other External Shocks on the Hong Kong Economy

2019 ◽  
pp. 239-260
Author(s):  
Hongyi Chen ◽  
Andrew Tsang
Keyword(s):  
Monetary Policy ◽  
Hong Kong ◽  
Financial Stability ◽  
Mainland China ◽  
External Shocks ◽  
Monetary Policies ◽  
Macroprudential Policies ◽  
Loan Quality ◽  
The Impact ◽  
Us Monetary Policy

This chapter uses the factor-augmented vector autoregression framework to study the impact on the Hong Kong economy of the diverging monetary policies by the Fed, the European Central Bank (ECB), and the Bank of Japan (BoJ), as well as the slowdown of the Mainland economy. The empirical results show that shocks in US monetary policy rate mainly affect interest rate-sensitive sectors in Hong Kong and that monetary easing from the ECB and the BoJ somewhat offsets the impact of tightening of the Fed. Real variables such as real GDP growth and the unemployment rate are more sensitive to the economic slowdown in Mainland China. However, Hong Kong’s financial stability, particularly with regard to loan quality, banks’ capital and liquidity, is well maintained by macroprudential policies, suggesting that Hong Kong’s financial system is resilient to external shocks.

scholarly journals The Impact of Unconventional Monetary Policy on Gendered Wealth Inequality

2019 ◽  
Vol 31 (2) ◽  
pp. 175-186 ◽  
Author(s):  
Brigitte Young
Keyword(s):  
Monetary Policy ◽  
Asset Prices ◽  
Household Finance ◽  
Wealth Inequality ◽  
Unconventional Monetary Policy ◽  
Distributional Effects ◽  
Monetary Policies ◽  
The Rich ◽  
The Impact ◽  
Central Bankers

Unconventional monetary policy was implemented as a result of the financial crisis and resulted in rising asset prices in the stock markets. While the increase in asset prices is not exclusively triggered by unconventional monetary policy, central bankers accept that unconventional monetary policy has resulted in distributional effects on wealth, and that these are not negligible. What is missing are studies analyzing whether these non-standard monetary policies have different distributional effects on women and men. The intent of the paper is to interrogate whether unconventional monetary policy of central banks has a gender bias that operates in favor of men as gender and against women as gender. Relying on insights from feminist economics, the paper uses the results of the ECB Household Finance and Consumption Survey (HFCS) of 62,000 household across 15 euro-area countries. While the results are tentative, they show an asymmetric distributional gendered impact. Since the rich own more assets than the poor, and since monetary easing works in part by raising asset prices, these unconventional policies may unintentionally benefit the wealthier quintile (on average more male) at the expense of the poorer strata of society (on average more female).

scholarly journals Respon Return Pasar Modal Indonesia terhadap Kebijakan Moneter Domestik dan Asing

2018 ◽  
Vol 7 (1) ◽  
pp. 1-20
Author(s):  
Aulia Yulianti Wulandari ◽  
Noer Azam Achsani ◽  
Lukytawati Anggraeni
Keyword(s):  
Monetary Policy ◽  
Stock Market ◽  
Spillover Effects ◽  
Jel Classification ◽  
External Shocks ◽  
Monetary Policies ◽  
Market Participants ◽  
Foreign Policies ◽  
Asean Countries ◽  
The Impact

Understanding the impact of external shocks on the stock market return and volatility is crucial for market participants as volatility is synonymous with risk. This paper provides comprehensive evidence on the spillover effects of the change of monetary policies from inside country and foreign origins on Indonesia stock market in the period of the time from November 2, 2012 to May 15, 2017. Used symmetric (IGARCH) and asymmetric (EGARCH and APARCH) GARCH model analysis to evaluate the impact of surprise and anticipated changes of monetary policies from inside country and foreign policies (from another ASEAN countries and leading economies, in this paper are United States, Europe, and United Kingdom). Surprise change of monetary policy is proxied by one day change in 3 months interbank offered rate, while anticipated change of monetary policy is proxied by one day change in target interest rate or policy rate. The result shows that information of the monetary policy news and Indonesia stock return is asymmetric. Indonesia stock market is only affected by foreign monetary policies. Keywords: ASEAN stock market, GARCH, Monetary policy JEL classification: C01, C50, E50

scholarly journals Respon Return Pasar Modal Indonesia terhadap Kebijakan Moneter Domestik dan Asing

2018 ◽  
Vol 7 (1) ◽  
pp. 1-20
Author(s):  
Aulia Yulianti Wulandari ◽  
Noer Azam Achsani ◽  
Lukytawati Anggraeni
Keyword(s):  
Monetary Policy ◽  
Stock Market ◽  
Spillover Effects ◽  
Jel Classification ◽  
External Shocks ◽  
Monetary Policies ◽  
Market Participants ◽  
Foreign Policies ◽  
Asean Countries ◽  
The Impact

Understanding the impact of external shocks on the stock market return and volatility is crucial for market participants as volatility is synonymous with risk. This paper provides comprehensive evidence on the spillover effects of the change of monetary policies from inside country and foreign origins on Indonesia stock market in the period of the time from November 2, 2012 to May 15, 2017. Used symmetric (IGARCH) and asymmetric (EGARCH and APARCH) GARCH model analysis to evaluate the impact of surprise and anticipated changes of monetary policies from inside country and foreign policies (from another ASEAN countries and leading economies, in this paper are United States, Europe, and United Kingdom). Surprise change of monetary policy is proxied by one day change in 3 months interbank offered rate, while anticipated change of monetary policy is proxied by one day change in target interest rate or policy rate. The result shows that information of the monetary policy news and Indonesia stock return is asymmetric. Indonesia stock market is only affected by foreign monetary policies. Keywords: ASEAN stock market, GARCH, Monetary policy JEL classification: C01, C50, E50

scholarly journals The Financial Crisis Response. Comparative Analysis Between European Union And USA

2017 ◽  
Vol 10 (1) ◽  
pp. 129-155 ◽  
Author(s):  
Florentina Melnic
Keyword(s):  
Risk Taking ◽  
Inflation Rate ◽  
Banking System ◽  
Central Banks ◽  
Crisis Response ◽  
Bond Markets ◽  
Real Economy ◽  
Monetary Policies ◽  
Policy Makers ◽  
The Impact

Abstract This paper reviews the measures adopted by central banks from the most important economies during the crisis and assess their effectiveness. It is important for policy makers to identify which measures were effective in limiting the financial system distress in order to adopt the appropiate measure during future crisis. In case of US, TARP was the most important program for banking system and it was effective in reducing banks’ contribution to systemic risk and banks’ default probabilities. But TARP also conducted to a reduction in loans growth and create incentives for higher risk-taking behavior. The unconventional monetary policies adopted by ECB during the period 2008- 2016 reduced the impact of the crisis on the European economy and achieved their objectives: to support banks’ funding and to increase lending to real economy (LTROs), to calm tensions from bond markets (CBPP, SMP, OMT), to support economic activity and to stabilize inflation rate (SMP, OMT, LTROs, APP).

scholarly journals The impact of fiscal and monetary policies on unemployment problem in Nigeria (managerial economic perspective)

2015 ◽  
Vol 5 (2) ◽  
pp. 101-109
Author(s):  
Nick Attamah ◽  
Anthony Igwe ◽  
Wilfred Isioma Ukpere
Keyword(s):  
Monetary Policy ◽  
Exchange Rates ◽  
Money Supply ◽  
Positive Relationship ◽  
A Priori ◽  
Government Expenditure ◽  
Unit Roots ◽  
Monetary Policies ◽  
The Impact ◽  
Unemployment Problem

This paper investigates the impact of fiscal and Monetary Policies on Unemployment Problem in Nigeria and covers the periods 1980 to 2013. To achieve this, fiscal policy was captured here by government expenditures and revenues respectively while monetary policy was proxied by broad Money Supply (M2), Interest and Exchange rates respectively. The methodology adopted was econometric analysis employing OLS techniques and unit roots of the series were examined using the Augmented Dickey-Fuller after which the co-integration tests was conducted using the Engle Granger approach. Error correction models were estimated to take care of the short run dynamics. It was found that while government expenditure had a positive relationship with unemployment problem in Nigeria, the result of government revenue was negative and insignificant on unemployment problem. For monetary policy, it was found that money supply and exchange rate had positive and significant impact while interest rate has only a positive relationship on unemployment problem in Nigeria. This meets the a priori expectation. The study also revealed that increases in interest and exchange rates escalate unemployment by increasing cost of production which discourages the private sector from employing large workforce. On the other hand, national productivity measured by real GDP had a negative and significant impact on unemployment rate in Nigeria. This paper recommends that for an effective combat to unemployment problem in Nigeria, there should be a systematic diversion of strategies, thus more emphasis should be laid on aggressively pursuing entrepreneurial development and increased productivity. Again government should aggressively focus on investment, employment generation and economic growth that has mechanism to trickle does to the masses.

scholarly journals Monetary Policy Shocks and Manufacturing Output in Nigeria (1981-2018)

2020 ◽  
Vol 7 (1) ◽  
pp. 27-37
Author(s):  
Yinka Sabuur Hammed
Keyword(s):  
Monetary Policy ◽  
Time Series Data ◽  
Policy Instrument ◽  
Series Data ◽  
Policy Makers ◽  
Long Run ◽  
Integration Test ◽  
Policy Shocks ◽  
Monetary Policy Shock ◽  
The Impact

This study empirically investigates the impact of monetary policy shock on the manufacturing output in Nigeria using time series data covering the period between 1981 and 2018. Co-integration test was used to establish the long run relationship among the variables and Structural Vector Auto-Regressive model was employed to test for the shocks. It was found that shock to broad money supply would bring about positive and significant impact on the manufacturing output while the impact of shock to interest rate was found to be negative and insignificant. This study however concludes that shock to broad money is the main monetary policy instrument which can bring about positive change to manufacturing output in Nigeria. This paper then suggests that government and policy makers should primarily focus on this variable in their implementation of unanticipated monetary policy.

The Impact of Financial Inclusion on Monetary Policy: A Case Study in Vietnam

2018 ◽  
pp. 5-22 ◽  
Author(s):  
Huong Thi Truc Nguyen
Keyword(s):  
Monetary Policy ◽  
Negative Impact ◽  
Financial Inclusion ◽  
Policy Makers ◽  
Main Research ◽  
Secondary Sources ◽  
Pca Method ◽  
The Impact ◽  
Aid Policy

This paper examines the impact of financial inclusion (FI) on monetary policy (MP) – a case study in Vietnam. The PCA method is used to construct a FI index- considered as a comprehensive measure of FI. To answer the main research questions, OLS and GLS models are used to analyze and to overcome the phenomenon of heteroskedasticity. Data is collected through secondary sources including World Bank and IMF reports (for the period 2004-2015). The results of empirical research indicate that there is a negative impact of FI on MP. Accordingly, FI transmits to more successful MP, making efficient financial intermediation and balances, contributing to a stable and sustainable economy. This study concludes that FI will enable monetary policy to extend its reach to the financially excluded and aid policy makers to make better predictions of movements in inflation.

WHY JOIN A CURRENCY UNION? A NOTE ON THE IMPACT OF BELIEFS ON THE CHOICE OF MONETARY POLICY

2011 ◽  
Vol 16 (2) ◽  
pp. 320-334 ◽  
Author(s):  
Federico Ravenna
Keyword(s):  
Monetary Policy ◽  
Open Economy ◽  
Policy Maker ◽  
Small Open Economy ◽  
Optimal Choice ◽  
New Keynesian ◽  
Monetary Policies ◽  
Keynesian Model ◽  
The Impact ◽  
Better Than

We argue that a fixed exchange rate can be an optimal choice even if a policy maker could commit to the first-best monetary policy whenever the private sector's beliefs reflect incomplete information about the policy maker's dependability. This model implies that joining a currency area may be optimal for its impact not on the behavior of the policy maker, but on the beliefs of the private sector. Monetary policies are evaluated using a new Keynesian model of a small open economy solved under imperfect policy credibility. We quantify the minimum distance between announced policy and the private sector's beliefs that is necessary for a peg to perform better than an independent monetary policy when the policy maker can commit to the first-best policy.

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