scholarly journals Price and output effects of Monetary policy in Low Income Countries: The Case of Nepal

2020 ◽  
Vol 7 (5) ◽  
pp. 478-499
Author(s):  
Nanda Kumar Dhakal ◽  
Mitra Prasad Timsina
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Private Sector ◽  
Low Income ◽  
Policy Instruments ◽  
Low Income Countries ◽  
Bank Rate ◽  
The Impact ◽  
Adf Test ◽  
Bound Test

This paper examines the impact of monetary policy on economic growth and inflation in Nepal. The impact on economic growth and inflation have been observed using monetary policy instruments/indicators such as CRR, bank rate, interbank rate, M1, M2, private sector credit based on quarterly data from first quarter of 2006 to fourth quarter of 2018. The impact on economic growth and inflation rate has been examined separately. The econometric methods like ADF test, ARDL Model, Bound Test, Error Correction Model, Residual Test and Stability test have been used in the study. The empirical results show that economic growth and inflation are influenced by monetary policy. CRR, bank rate, broad money and private sector credit are significant to have impact on economic growth. Likewise, money supply (M1 and M2) has impact on inflation. The result shows that it takes longer time to have impact of broad money and private sector credit on economic growth than on inflation.

Measuring Effectiveness Of Economic Growth On Reducing Infant Mortality Rate In Tamilnadu

2019 ◽  
Vol 118 (4) ◽  
pp. 129-141
Author(s):  
Mr. Y. EBENEZER
Keyword(s):  
Economic Growth ◽  
Mortality Rate ◽  
Infant Mortality ◽  
Negative Relationship ◽  
Infant Mortality Rate ◽  
Domestic Product ◽  
Per Capita ◽  
The Impact ◽  
Adf Test ◽  
Bound Test

                   This paper deals with economic growth and infant mortality rate in Tamilnadu. The objects of this paper are to test the relationship between Per capita Net State Domestic Product and infant mortality rate and also to measure the impact of Per capita Net State Domestic Product on infant mortality rate in Tamil Nadu. This analysis has employed the ADF test and ARDL approach. The result of the study shows that IMR got reduced and Per capita Net State Domestic Product increased during the study period. This analysis also revealed that there is a negative relationship between IMR and the economic growth of Tamilnadu. In addition, ARDL bound test result has concluded that per capita Net State Domestic Product of Tamilnadu has long run association with IMR.

scholarly journals Respons Of Islamic Stock Markets To Monetary Policy Empirical Evidence from Indonesia

2019 ◽  
Vol 1 (1) ◽  
pp. 35-46
Author(s):  
Muhammad Rasyidin ◽  
Zunaidah Sulong
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Stock Market ◽  
Significant Relationship ◽  
Policy Instruments ◽  
Capital Formation ◽  
Alternative Source ◽  
Market Strategy ◽  
Long Run ◽  
The Impact

AbstractPurpose - The impact of stock market and capital formation on economic growth in Indonesia for the period of January 2015 – May 2019. This paper examines a long-run equilibrium relation between stock market, capital formation and economic growth and other control variables.Method - This study uses autoregressive distributed lag (ARDL) model.Result - Findings revealed that none of the models was stationary at level but were all stationary at first difference. There is not a short run significant relationship between stock market, capital formation and economic growth in Indonesia. In the long run, capital formation has a significant positive association on economic growth and a negative non-significant relationship between stock market and economic growth in Indonesia.Implication - This research is useful to know the response of Sharia market to monetary policy instruments in Indonesia so that the Sharia stock market strategy is potentially developing in the future to encourage the achievement of characteristics such as An alternative source of financing and investment for economic actors and able to facilitate risk mitigation needs for market participants and able to drive the efficiency of transactions in the market through the improvement of the quality of stock market infrastructure Sharia.  Originality - The update of this research is response of Sharia stock market response to monetary policy instruments in Indonesia that are researched using ARDL models.

scholarly journals Respons Of Islamic Stock Markets To Monetary Policy Empirical Evidence from Indonesia

2019 ◽  
Vol 1 (1) ◽  
pp. 35
Author(s):  
Muhammad Rasyidin ◽  
Zunaidah Sulong
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Stock Market ◽  
Significant Relationship ◽  
Policy Instruments ◽  
Capital Formation ◽  
Alternative Source ◽  
Market Strategy ◽  
Long Run ◽  
The Impact

<p class="StyleIABSSSLatinBoldGray-80">Abstract</p><p class="IABSSS"><strong>Purpose</strong> - The impact of stock market and capital formation on economic growth in Indonesia for the period of January 2015 – May 2019. This paper examines a long-run equilibrium relation between stock market, capital formation and economic growth and other control variables.</p><p class="IABSSS"><strong>Method</strong><strong> </strong>- This study uses autoregressive distributed lag (ARDL) model.</p><p class="IABSSS"><strong>Result</strong><strong> </strong>- Findings revealed that none of the models was stationary at level but were all stationary at first difference. There is not a short run significant relationship between stock market, capital formation and economic growth in Indonesia. In the long run, capital formation has a significant positive association on economic growth and a negative non-significant relationship between stock market and economic growth in Indonesia.</p><p class="IABSSS"><strong>Implication</strong> - This research is useful to know the response of Sharia market to monetary policy instruments in Indonesia so that the Sharia stock market strategy is potentially developing in the future to encourage the achievement of characteristics such as An alternative source of financing and investment for economic actors and able to facilitate risk mitigation needs for market participants and able to drive the efficiency of transactions in the market through the improvement of the quality of stock market infrastructure Sharia.  </p><p><strong>Originality</strong> - The update of this research is response of Sharia stock market response to monetary policy instruments in Indonesia that are researched using ARDL models.</p>

Monetary Policy in Low-Income Countries in the Face of the Global Crisis

2018 ◽  
Author(s):  
Alfredo Baldini ◽  
Jaromir Benes ◽  
Andrew Berg ◽  
Mai C. Dao ◽  
Rafael Portillo
Keyword(s):  
Monetary Policy ◽  
General Equilibrium ◽  
Low Income ◽  
Dynamic Stochastic General Equilibrium ◽  
Policy Implications ◽  
Low Income Countries ◽  
Policy Response ◽  
Risk Appetite ◽  
Dynamic Stochastic ◽  
The Impact

The authors develop a dynamic stochastic general equilibrium (DSGE) model with a banking sector to analyse the impact of the financial crisis in developing countries and the role of the monetary policy response, with an application to Zambia. The crisis is interpreted as a combination of three related shocks: a worsening in the terms of the trade, an increase in the country’s risk premium, and a decrease in the risk appetite of local banks. Model simulations broadly match the path of the economy during this period. The model-based analysis reveals that the initial policy response contributed to the domestic impact of the crisis by further tightening financial conditions. The authors derive policy implications for central banks, and for dynamic stochastic general equilibrium modelling of monetary policy, in low-income countries.

scholarly journals On the determinants of trade openness in low- and lower–middle-income countries in Africa: how important is economic growth?

2019 ◽  
Vol 5 (1) ◽  
Author(s):  
Dennis Boahene Osei ◽  
Yakubu Awudu Sare ◽  
Muazu Ibrahim
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Low Income Countries ◽  
Special Focus ◽  
Middle Income ◽  
Middle Income Countries ◽  
Real Gdp Per Capita ◽  
The Impact

AbstractThe existing literature highlights the determinants of trade openness with disregard to the income classifications of countries in examining whether the determinants differ given their income levels. This study, therefore, re-examines the drivers of trade openness in Africa relying on panel data with special focus on the role of economic growth. More specifically, we perform a comparative analysis of the factors influencing trade openness for low-income and lower–middle-income countries using the system generalized method of moments. Our findings suggest that, while economic growth robustly enhances openness in low-income countries, in the case of lower–middle-income countries, the impact is not robust and largely negative suggesting that higher growth is associated with less openness. We also find that, economic growth–openness nexus for the lower-income countries exhibits non-linearities and inverted U-shaped relationship in particular. Thus, while increases in real GDP per capita enhance openness, beyond an estimated threshold point, any increases in economic growth dampen openness. We discuss key implications for policy.

scholarly journals Structural VARs and the Monetary Transmission Mechanism in Low-Income African Countries†

2019 ◽  
Vol 28 (4) ◽  
pp. 455-478
Author(s):  
Bin Grace Li ◽  
Christopher Adam ◽  
Andrew Berg ◽  
Peter Montiel ◽  
Stephen O’Connell
Keyword(s):  
Monetary Policy ◽  
Low Income ◽  
Transmission Mechanism ◽  
Low Income Countries ◽  
Monetary Transmission ◽  
Finite Sample ◽  
African Countries ◽  
Monetary Transmission Mechanism ◽  
Structural Vars ◽  
The Impact

AbstractStructural Vector Autoregression (SVAR) methods suggest the monetary transmission mechanism may be weak and unreliable in many low-income African countries. But are structural VARs identified via short-run restrictions capable of detecting a transmission mechanism when one exists, under research conditions typical of low-income countries (LICs)? Using a small DSGE as our data-generating process, we assess the impact on VAR-based inference of short data samples, measurement error, high-frequency supply shocks, and other features of the LIC environment. The impact of these features on finite-sample bias appears to be relatively modest when identification is valid—a strong caveat, especially in LICs. Nonetheless many of these features undermine the precision of estimated impulse responses to monetary policy shocks, and cumulatively they suggest that statistically and economically insignificant results can be expected even when the underlying transmission mechanism is strong. These data features not only undermine the efficacy of the SVAR methodology for research and policy-making, but are also severe enough to motivate a continued search for monetary policy rules that are robust to these limitations.

Informal financial transactions and monetary policy in low-income countries: Interpolated informal credit and interest rates in Malawi

2018 ◽  
Vol 21 (1) ◽  
Author(s):  
Harold Ngalawa
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Low Income ◽  
Economic Activity ◽  
Financial Sector ◽  
Low Income Countries ◽  
Policy Outcomes ◽  
Vector Autoregressive ◽  
Financial Transactions ◽  
The Impact

Background: Official monetary data usually exclude informal financial transactions although the informal financial sector (IFS) forms a large part of the financial sector in low-income countries. Aim and setting: Excluding informal financial transactions in official monetary data, however, underestimates the volume of financial transactions and incorrectly presents the cost of credit, bringing into question the accuracy of expected effects of monetary policy on economic activity. Methods: Using IFS data for Malawi constructed from two survey data sets, indigenous knowledge and elements of Friedman’s data interpolation technique, this study employs innovation accounting in a structural vector autoregressive model to compare monetary policy outcomes when IFS data are taken into account and when they are not. Results: The study finds evidence that in certain instances, the formal and informal financial sectors complement each other. For example, it is observed that the rate of inflation as well as output increase following a rise in either formal financial sector (FFS) or IFS lending. Further investigation reveals that in other cases, the FFS and IFS work in conflict with each other. Demonstrating this point, the study finds that a rise in FFS interest rates is followed by a decline in FFS lending while IFS lending does not respond significantly and the response of FFS and IFS loans combined is insignificant. When IFS interest rates are raised, total loans decline significantly. Conclusion: The study, therefore, concludes that exclusion of IFS transactions from official monetary data has the potential to frustrate monetary policy through wrong inferences on the impact of monetary policy on economic activity.

scholarly journals The Effects of Information and Communication Technology (ICT) Use on Human Development—A Macroeconomic Approach

Economies ◽  
2021 ◽  
Vol 9 (3) ◽  
pp. 128
Author(s):  
Nada Karaman Aksentijević ◽  
Zoran Ježić ◽  
Petra Adelajda Zaninović
Keyword(s):  
Economic Growth ◽  
Human Development ◽  
Communication Technology ◽  
Low Income ◽  
Low Income Countries ◽  
Middle Income ◽  
Ict Use ◽  
Information And Communication ◽  
The Impact

Information and communication technology (ICT) is considered a significant factor in economic growth and development. Over the past two decades, scholars have studied the impact of ICT on economic growth, but there has been little research that has addressed the impact of ICT on human development, which is considered one of the fundamental factors of economic development. This could be especially important from the perspective of developing countries, which can develop faster through the implementation of ICT. Thus, the aim of this paper is to investigate the effects of ICT use on human development, distinguishing effects among high, upper-middle, lower-middle and low-income countries following the World Bank classification 2020. Our sample includes 130 countries in the period from 2007 to 2019. The empirical analysis is based on dynamic panel data regression analysis. We use Generalized Method of Moments (GMM) as an estimator, i.e., two-step system GMM. The results primarily support the dynamic behaviour of human development. The results of the analysis also show that ICT has highly significant positive effects on human development in lower-middle-income and low-income countries, while the effects do not appear to be significant in high- and middle-income countries. This research serves as an argument for the need to invest in ICT and its implementation in low-income countries; however, it also suggests that the story is not one-sided and that there are possible negative effects of ICT use on human development. From the perspective of economic policy, the results can be a guideline for the implementation and use of ICT in developing countries, which could lead to economic growth and development and thus better quality of life. On the other hand, policymakers in developed countries cannot rely on ICT alone; they should also consider other technological innovations that could ensure a better quality of life.

scholarly journals The Relationship between Financial Development and Economic Growth: The Case of Turkey

2016 ◽  
Author(s):  
Müge Manga ◽  
Mehmet Akif Destek ◽  
Muammer Tekeoğlu ◽  
Erkut Düzakın
Keyword(s):  
Economic Growth ◽  
Private Sector ◽  
Trade Liberalization ◽  
Money Supply ◽  
Financial Development ◽  
Integration Test ◽  
Domestic Credit ◽  
The Impact ◽  
Bound Test ◽  
The Relationship

The relationship between financial development and economic growth and the direction of causality between them have been received a lot of attention recently by many scholars. It is also important to analyze this relationship and the direction of causality due to implications of policies. In this study the relationship between financial development, trade liberalization and economic growth for Turkey are examined using three different models. Model 1, 2 and 3 investigate the effect of domestic loans to the private sector and trade liberalization on GDP, the impact of the domestic credit provided by banks to the private sector and trade liberalization on GDP and the effect of M2 money supply and M2 trade liberalization on GDP, respectively. Data extracted from World Development Indicators. Autoregressive-Distributed Lag Bound Test (ARDL) is used as a co-integration test to determine the long run relationship between variables. In addition, Toda and Yamamoto (1995) is utilized to test the direction of causality between financial development and economic growth according to the three financial indicators such as domestic loans to the private sector, the domestic credit provided by banks to the private sector and M2 money supply. According to the results there is a unidirectional relationship from economic growth to domestic loans to the private sector and the domestic credit provided by banks to the private sector. Additionally, the results indicate that a bidirectional relationship exist between M2 money supply and economic growth.

The Impact of Workers’ Remittances on Private Investment and Total Consumption in Pakistan

2011 ◽  
Vol 1 (1) ◽  
pp. 152 ◽  
Author(s):  
Kausar Yasmeen ◽  
Ambreen Anjum ◽  
Kashifa Yasmeen ◽  
Sidra Twakal
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
Time Series Data ◽  
Private Investment ◽  
Developed Countries ◽  
Least Square ◽  
Low Income Countries ◽  
Series Data ◽  
Total Consumption ◽  
The Impact

To check the two Objectives of the study one exploring the impact of work remittance on economic growth and second is Impact of work remittance on private investment and total consumption, 25 years’ time series data collected from the Economic survey of Pakistan for the time 1984-2009. The methodology used for the analysis, is Regression model so for regression we have used OLS (ordinary least square model).the work remittance has positively related with the Private investment and total consumption which results increase in GDP and economic growth of Pakistan. This research favor the study of Burki (1991),Ahmad(1986), Charless (1989) Adam(1998) and Darry (2005) this research may be helpful for other low income countries, they can analysis the Workers’ remittances impact on Private investment and Total consumption  of their countries to encourage the workers remittance. Developing countries may request to developed countries to soft police for work remittance in favor of their countries. This might boost their TC and PI which boost up the economy.

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