Monetary Policy and the Top 10%: A Time-Series Analysis Using ARDL and ECM

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Nadeen Omar ◽  
Christian Richter
Keyword(s):  
Time Series ◽  
Monetary Policy ◽  
Interest Rate ◽  
Income Inequality ◽  
Dynamic Models ◽  
Short Term ◽  
Main Hypothesis ◽  
Income Share ◽  
Distributed Lag ◽  
The Impact

Abstract For the past decades, income inequality has been on the rise, and so is the frequency of its mentions in recent speeches by central bankers. With the heightened importance of the topic, this research aims to study the impact of monetary policy on income inequality. The study used dynamic models for the analysis, namely; the Error-correction Model (ECM) and the Auto-regressive Distributed Lag (ARDL) model to determine the relationship in both the short- and long-run. The data used were the top 10% income share and the short-term interest rate. Our main hypothesis is that changes in the short-term interest rate have a significant impact on the top 10% income share. We draw time-series evidence from a sample of nine economies at different stages of development: United States, United Kingdom, Russia, Germany, France, Greece, China, South Africa and Chile. The findings support the hypothesis with interestingly varying effects across our sample. These results provide important implications that can contribute in bettering policy setting and add to the discussion of the role of central banks in reducing income inequality.

scholarly journals Assessing the Role of Money versus Interest Rate in Pakistan

2020 ◽  
Vol 59 (1) ◽  
pp. 101-114
Author(s):  
Zafar Hayat ◽  
Muhammad Nadim Hanif
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Relative Effectiveness ◽  
Policy Instruments ◽  
Jel Classification ◽  
Short Term ◽  
Price Puzzle ◽  
The Interest Rate ◽  
The Impact

We have empirically examined the role of monetary aggregate(s) vis-à-vis short-term interest rate as monetary policy instruments, and the impact of State Bank of Pakistan’s transformation into the latter on their relative effectiveness in terms of inflation in Pakistan. Using indicators of ‘persistent changes’ in the underlying behaviours of variables of interest, we found that broad money consistently explains inflation in (i) monetary (ii) transitory and (iii) interest rate regimes. Though its role has receded while moving from the transition to the interest rate regime, the interest rate instrument seems to be positively related to inflation, a phenomenon commonly known as price puzzle. In light of these findings, we recommend that the role of money should not be completely de-emphasised. JEL Classification: E31, E52. Keywords: Monetary Policy Instruments, Price Puzzle, ARDL, Pakistan

scholarly journals The Contribution of Monetary Policy to Mitigating the Consequences of the World Economic Crisis in Poland

2019 ◽  
Vol 57 (3) ◽  
pp. 329-350
Author(s):  
Vlado Vujanić ◽  
Dragan Gligorić ◽  
Nikola Žarković
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Real Exchange Rate ◽  
Money Supply ◽  
Economic Activity ◽  
The Real ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
The Impact

AbstractThe economic authorities of each country seek to maintain the expansion phase through the implementation of various economic policy measures, namely, to prevent or mitigate the recessionary phase in economic development. In that context, it is of considerable importance to understand how monetary policy decisions affect the movement of macroeconomic variables. The paper aims to examine and evaluate the contribution of monetary policy to mitigating the effects of the global economic and financial crisis, using the Autoregressive Distributed Lag model, by analysing the impact of the real exchange rate, reference interest rate and money supply on the level of economic activity in Poland. Econometric analysis encompasses the period from 2006 to 2017. The research results suggest that there is a significant relationship between real economic activity and the real exchange rate both in the short and long term, but not between the reference interest rate and the money supply.

Dampak Kebijakan Moneter Pada Output Di Negara-Negara ASEAN Tahun 1980-2014

2017 ◽  
Vol 4 (1) ◽  
pp. 58-70
Author(s):  
Nur Widiastuti
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Fixed Effects ◽  
Empirical Studies ◽  
Negative Relationship ◽  
Least Square ◽  
Fixed Effects Model ◽  
State Data ◽  
Ordinary Least Square ◽  
The Impact

The Impact of monetary Policy on Ouput is an ambiguous. The results of previous empirical studies indicate that the impact can be a positive or negative relationship. The purpose of this study is to investigate the impact of monetary policy on Output more detail. The variables to estimatate monetery poicy are used state and board interest rate andrate. This research is conducted by Ordinary Least Square or Instrumental Variabel, method for 5 countries ASEAN. The state data are estimated for the period of 1980 – 2014. Based on the results, it can be concluded that the impact of monetary policy on Output shown are varied.Keyword: Monetary Policy, Output, Panel Data, Fixed Effects Model

Monetary policy and the effect of the transfer of oil prices to inflation

2020 ◽  
pp. 41-50
Author(s):  
Ph. S. Kartaev ◽  
I. D. Medvedev
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Dynamic Models ◽  
Oil Prices ◽  
Oil Price ◽  
Oil Price Shocks ◽  
Negative Effects ◽  
Price Shocks ◽  
Policy Regime ◽  
The Impact

The paper examines the impact of oil price shocks on inflation, as well as the impact of the choice of the monetary policy regime on the strength of this influence. We used dynamic models on panel data for the countries of the world for the period from 2000 to 2017. It is shown that mainly the impact of changes in oil prices on inflation is carried out through the channel of exchange rate. The paper demonstrates the influence of the transition to inflation targeting on the nature of the relationship between oil price shocks and inflation. This effect is asymmetrical: during periods of rising oil prices, inflation targeting reduces the effect of the transfer of oil prices, limiting negative effects of shock. During periods of decline in oil prices, this monetary policy regime, in contrast, contributes to a stronger transfer, helping to reduce inflation.

scholarly journals Relationship between daily suicide counts and temperature in England and Wales

2007 ◽  
Vol 191 (2) ◽  
pp. 106-112 ◽  
Author(s):  
Lisa A. Page ◽  
Shakoor Hajat ◽  
R. Sari Kovats
Keyword(s):  
Time Series ◽  
Seasonal Fluctuation ◽  
Daily Temperature ◽  
Short Term ◽  
Time Series Regression ◽  
England And Wales ◽  
Increased Risk ◽  
Hot Weather ◽  
The Impact ◽  
The Relationship

BackgroundSeasonal fluctuation in suicide has been observed in many populations. High temperature may contribute to this, but the effect of short-term fluctuations in temperature on suicide rates has not been studied.AimsTo assess the relationship between daily temperature and daily suicide counts in England and Wales between 1 January 1993 and 31 December 2003 and to establish whether heatwaves are associated with increased mortality from suicide.MethodTime-series regression analysis was used to explore and quantify the relationship between daily suicide counts and daily temperature. The impact of two heatwaves on suicide was estimated.ResultsNo spring or summer peak in suicide was found. Above 18 °, each 1 ° increase in mean temperature was associated with a 3.8 and 5.0% rise in suicide and violent suicide respectively. Suicide increased by 46.9% during the 1995 heatwave, whereas no change was seen during the 2003 heat wave.ConclusionsThere is increased risk of suicide during hot weather.

Measuring Value Change in Western Industrialized Societies: The Impact of Unemployment

1991 ◽  
Vol 85 (3) ◽  
pp. 905-920 ◽  
Author(s):  
Harold D. Clarke ◽  
Nitish Dutt
Keyword(s):  
Time Series ◽  
Economic Conditions ◽  
Aggregate Level ◽  
Value Change ◽  
Short Term ◽  
Cross Sectional ◽  
The Past ◽  
Value Priorities ◽  
Time Series Analyses ◽  
The Impact

During the past two decades a four-item battery administered in biannual Euro-Barometer surveys has been used to measure changing value priorities in Western European countries. We provide evidence that the measure is seriously flawed. Pooled cross-sectional time series analyses for the 1976–86 period reveal that the Euro-Barometer postmaterialist-materialist value index and two of its components are very sensitive to short-term changes in economic conditions, and that the failure to include a statement about unemployment in the four-item values battery accounts for much of the apparent growth of postmaterialist values in several countries after 1980. The aggregate-level findings are buttressed by analyses of panel data from three countries.

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.

scholarly journals Macroeconomic determinants of interest rate spreads in Ghana

2017 ◽  
Vol 8 (1) ◽  
pp. 76-88 ◽  
Author(s):  
Samuel Kwabena Obeng ◽  
Daniel Sakyi
Keyword(s):  
Interest Rate ◽  
Exchange Rate Volatility ◽  
Institutional Quality ◽  
Fiscal Discipline ◽  
Content Type ◽  
Distributed Lag ◽  
Short Run ◽  
Interest Rate Spreads ◽  
Macroeconomic Determinants ◽  
The Impact

Purpose The purpose of this paper is to examine macroeconomic determinants of interest rate spreads in Ghana for the period 1980-2013. Design/methodology/approach The autoregressive distributed lag bounds test approach to cointegration and the error correction model were used for the estimation. Findings The results indicate that exchange rate volatility, fiscal deficit, economic growth, and public sector borrowing from commercial banks, increase interest rate spreads in Ghana in both the long and short run. Institutional quality reduces interest rate spreads in the long run while lending interest rate volatility and monetary policy rate reduce interest rate spreads in the short run. Research limitations/implications The depreciation of the Ghana cedi must be controlled since its volatility increases spreads. There is a need for fiscal discipline since fiscal deficits increase interest rate spreads. Government must reduce its domestic borrowing because the associated crowding-out effect increases interest rate spreads. The central bank must improve its monitoring and regulation of the financial sector in order to reduce spreads. Originality/value The main novelty of the paper (compared to other studies on Ghana) lies on the one hand; analysing macroeconomic determinants of interest rate spreads and, on the other hand, controlling for the impact of institutional quality on interest rate spreads in Ghana.

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