scholarly journals The influence of indirect monetary tools on price and output: the case of Jordan (1993-2013)

2017 ◽  
Vol 12 (1) ◽  
pp. 8-13
Author(s):  
Usama R. Alqalawi ◽  
Hail A. Jemel ◽  
Ahmad A. Alwaked ◽  
Rasha M.S. Istaiteyeh
Keyword(s):  
Monetary Policy ◽  
Money Supply ◽  
Time Series Data ◽  
Jel Classification ◽  
Series Data ◽  
Policy Tools ◽  
Open Market ◽  
Output Level ◽  
Repurchase Agreements ◽  
The Impact

This research aims to identify the main monetary policy tools in Jordan, then, to estimate their effect on price and output level. A time series data covering the period between 1993 and 2013 were utilized to estimate the targeted models using two-step regression. Firstly, the authors measured the impact of indirect policy tools on money supply and, secondly, they determined the impact of money supply on price and output levels. Results show that open market operations of the Central Bank of Jordan through issuance of certificates of deposit, especially at the beginning of 1993 and the repurchase agreements have been effective in influencing the money supply in Jordan. Unfortunately, this policy was not able to control the real or nominal output level even though it has an effect on the price level. Keywords: monetary policy, open market operations, required reserve ratio, discount rate, price and output. JEL Classification: E31, E42, E52, E58

IMPACT OF MONETARY POLICY TARGETS ON CAPITAL MARKET DEVELOPMENT IN NIGERIA

2021 ◽  
Vol 8 (1) ◽  
pp. 85-95
Author(s):  
Abdulkarim Musa ◽  
◽  
Uwaleke Uche ◽  
Nwala Nneka ◽  
◽  
...  
Keyword(s):  
Monetary Policy ◽  
Money Supply ◽  
Capital Market ◽  
Time Series Data ◽  
Market Development ◽  
Series Data ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
The Impact

This study empirically examines the impact of monetary policy targetson capital market development in Nigeria from 1986-2018. Time series data and econometric tools were used to test for the stationarity and causality effect. The Auto-Regressive Distributed Lag Model (ARDL) and Error Correction Model (ECM) techniques were used to examine the short-run and long-run impact and relationship between Monetary Policy and Capital Market Development in Nigeria. The study revealed that both in the long run and short run Exchange Rate (EXCHR), Inflation Rate (INFR), and Interest Rate in Nigeria (INTR)were negatively related to Capital Market Development (CAMKTD) in Nigeria and they were statistically insignificant in explaining changes in Capital Market Development (CAMKTD) in Nigeria. On the other hand, inthe long run, Money Supply was positively related to Capital Market Development (CAMKTD) in Nigeria and was statistically significant at a 5% level significant while Money Supply (M2) was positively related to Capital Market Development (CAMKTD) in Nigeria both in the long run and short-run and was statistically significant at 5% level of significance. Therefore, the study recommends that government should improve the efficiency and effectiveness of the money supply in Nigeria since it was statistically significant in determining the improvement of Capital Market Development (CAMKTD) in Nigeria.

scholarly journals PENGARUH KEBIJAKAN MONETER DAN FISKAL TERHADAP PENGANGGURAN DI INDONESIA

2021 ◽  
Vol 4 (1) ◽  
pp. 433-442
Author(s):  
Triyas Ayu Hadi Setiowati ◽  
Ris Yuwono Yudo Nugroho
Keyword(s):  
Monetary Policy ◽  
Money Supply ◽  
Impulse Response ◽  
Unemployment Rate ◽  
Government Spending ◽  
Time Series Data ◽  
Variance Decomposition ◽  
Series Data ◽  
Tax Revenue ◽  
The Impact

The purpose of this study is to analyze the impact of monetary policy as seen from the BI Rate and the money supply (M2, and fiscal policy as seen from government spending and tax revenue in influencing the unemployment rate in Indonesia. The approach used in this research is quantitative. The data used are the BI Rate, the money supply (M2), government spending, tax revenue and unemployment in the form of time series data in an annual form from 1995 to 2019. The method used in this study is the Vector Auto analysis model. Regression (VAR). The stages used in this research test are a stationarity test, optimum lag test, VAR stability test, impulse response test, and variance decomposition test. The results of the impulse response indicate that the unemployment variable responds most to the shock of the interest rate variable (monetary policy) compared to other variables. The results of variance decomposition indicate that the contribution given by the BI Rate to the unemployment rate is the most significant relative to the contribution given by the variable money supply (M2), government spending, and tax revenue

scholarly journals Monetary Policy and Domestic Investment in Nigeria: The Role of the Inflation Rate

2020 ◽  
Vol 34 (1) ◽  
pp. 139-155
Author(s):  
Obinna Franklin Ezeibekwe
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Money Supply ◽  
Inflation Rate ◽  
Bank Lending ◽  
Policy Tools ◽  
Open Market ◽  
Domestic Investment ◽  
Inflation Rates ◽  
The Impact

AbstractEconomic theory suggests that monetary policy can be used to stabilize an economy. However, the ability of monetary policy targets—interest rates and money supply—to stabilize an economy depends on their ability to achieve price stability. Using data from 1981 to 2018 and applying the vector error correction model, this paper seeks to determine how the changes in the inflation rate affect the ability of monetary policy tools to stabilize the Nigerian economy and stimulate investment. Empirical results suggest that the impact of the interest rates on investment depends on the level of the inflation rate. The size of the effect of interest rates on investment gets weaker as the inflation rate increases suggesting that monetary policy tools, such as the monetary policy rate (MPR), that directly change the interest rates are robust stabilization tools during periods of declining inflation rates but not relevant during periods of rising inflation rates. This is attributable to low bank lending rates. Additionally, the impact of the money supply target on investment does not depend on the level of the inflation rate. This suggests that monetary policy tools, such as open market operations, that directly change the money supply can be relevant stabilization tools during economic booms and recessions. As a result, the Central Bank of Nigeria should work to deepen the scale, capacity, and efficiency of its open market operations by ensuring that most of the people can participate with minimal transaction cost and by making different financial instruments available.

scholarly journals A MONETARY ANALYSIS OF GHANA: EXAMINING THE IMPACT AND THE CAUSAL RELATIONSHIP BETWEEN MONETARY POLICY AND INFLATION IN GHANA

2020 ◽  
Vol 4 (1) ◽  
pp. 1-14
Author(s):  
Edmund Obeng Amaning ◽  
Ali Napari Seidu
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Causal Relationship ◽  
Money Supply ◽  
Time Series Data ◽  
Positive Impact ◽  
Negative Relationship ◽  
Theory And Practice ◽  
Series Data ◽  
The Impact

Purpose: The main objective of the study was to examine the impact and the causal relationship between monetary policy and inflation in Ghana.Methodology: Annual time series data spanning from 1985 to 2017 with Auto Regressive Distributed Lagged (ARDL) model were employed for the analysis.Findings: The outcome from the study shows that, monetary policy rate had insignificant negative relationship with inflation in both the short and the long run. Again, interest rate, domestic investment and money supply were found to have significant positive impact on inflation in both the long and the short run for a specific period chosen for the study.The causal relationship shows that monetary policy rate granger causes money supply within the period understudyUnique contribution to theory and practice: The study recommends that policy makers need to keenly consider the levels of money supply in Ghana so as to ensure a stable retail price levels. The Government of Ghana needs to evaluate the prevailing levels of retail prices and set the interest rates on the 91-day Treasury bills because they are majorly treated as risk free rate hence determines other interest rates and inflation levels in Ghana.

scholarly journals Impact of Monetary Policy on Bank Credit in Nigeria

2020 ◽  
Vol 3 (3) ◽  
pp. 196-205
Author(s):  
Alade Ayodeji Ademokoya ◽  
Mubaraq Sanni ◽  
Lukman Adebayo Oke ◽  
Segun Abogun
Keyword(s):  
Monetary Policy ◽  
Money Supply ◽  
Time Series Data ◽  
Least Square ◽  
Bank Credit ◽  
Series Data ◽  
Credit Creation ◽  
Lending Rate ◽  
Ordinary Least Square Regression ◽  
The Impact

Objective – The aim of this study is to examine the impact of monetary policy on credit creation ability of banks in Nigeria. Specifically, it investigates the impact of monetary policy rate, money supply, liquidity ratio, and change in maximum lending rate on bank credit in Nigeria. Design/methodology – A monthly time series data from 2007-2019 were sourced from the Central Bank’s of Nigeria statistical bulletin. The sourced data was subjected to multiple regression analysis using the fully modified ordinary least square regression to estimate the parameters of the model. Results – Findings reveal that money supply significantly and positively influence bank credit in Nigeria; while liquidity ratio significantly but negatively influence bank credit in Nigeria. On the contrary, monetary policy rate and maximum lending rate were found not to significantly affect bank credit in the case of Nigeria.Policy Recommendation - Study therefore, recommend that monetary authorities especially, the Central Bank of Nigeria should pay more attention to lowering the liquidity ratio while increasing money supply in order to engender banks credit creation ability and further stimulate the Nigerian economy for growth.

scholarly journals Impacts of Monetary Policy on Inflation in Bangladesh

2012 ◽  
Vol 1 (2) ◽  
pp. 103-119
Author(s):  
Mohammad Nayeem Abdullah ◽  
Kamruddin Parvez ◽  
Rahat Bari Tooheen
Keyword(s):  
Monetary Policy ◽  
Money Supply ◽  
Consumer Price Index ◽  
Developed Countries ◽  
Open Market ◽  
Major Transitions ◽  
Classification Code ◽  
Inflation Rates ◽  
The Developed Countries ◽  
The Impact

The objective of this paper is to analyze and discuss the impacts of monetary policy on Bangladesh inflation, identify the major drawbacks of the policies in minimizing the inflation rate and suggest policy recommendations on some key issues of Bangladesh inflation. To estimate the effects of the monetary policy in Bangladesh, at first the impact of different monetary policy tools used by the “Central Banks” of the developed countries have been reviewed. Next, the impact of the monetary policy of Bangladesh Bank and government have been analyzed for which the data on money supply, growth of the GDP, changes in the price level, and changes in the unemployment rate have been quantitatively analyzed. We mainly used Consumer Price Index to determine the level on inflation in Bangladesh. Moreover, our study focuses on data collected from the 1950-2012, mainly focusing our study from the period of 2000-2012 as major transitions have been observed in the economy during the 12 years. We have further analyzed whether there is any correlation between (i) inflation rates and money supply, and (ii) inflation rates and growth of GDP. On the basis of the outcome of the qualitative and quantitative analysis, in the end findings and conclusion have been drawn. We have found the correlation, the impacts of monetary policy and inflation, their drawbacks and possible solutions such as independence of the monetary policy from the fiscal policy and enhancing the transparency, communication and signaling effect of policy moves, keeping the broad money in line with the estimated real GDP growth, borrowing from non-bank sources, and control money supply through various open market operations. Due to lack of access to sufficient data, some of our work is based on hypothesis and models. So some data vary according to the model being used. Lastly, even though, many works have been done from the perspective of developed and other developing countries, much work has not been carried out to establish the relationship between monetary policy and inflation in Bangladesh. GEL Classification Code: E31; E42; E50

scholarly journals Effectiveness and Forecasting of Interest Rate Reversal BI 7-Day Repo Rate in Indonesia: Lower Bound on Monetary Policy?

2018 ◽  
Vol 9 (1) ◽  
pp. 171-180
Author(s):  
I Gede Sanica ◽  
I Ketut Nurcita ◽  
I Made Mastra ◽  
Desak Made Sukarnasih
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Time Series Data ◽  
Moving Average ◽  
Series Data ◽  
Autoregressive Integrated Moving Average ◽  
Implementation Of Monetary Policy ◽  
Repo Rate ◽  
The Right ◽  
The Impact

AbstractThis study aims to analyze effectivity and forecast of interest rate BI 7-Day Repo Rate as policy reference in the implementation of monetary policy. The method was used in this study contains Vector Autoregression (VAR) to estimate effectivity of BI 7-Day Repo Rate and Autoregressive Integrated Moving Average (ARIMA) to forecast of BI 7-Day Repo Rate. Period of observation in this study used time series data during 2016.4 until 2017.6. The result of this research shows that the transformation of the BI Rate to BI 7-Day Repo Rate is the right step in the monetary policy operation in the effort to reach deepening of the financial market and strengthen the interbank money market structure so that it will decrease loan interest rate and encourage credit growth. The effectiveness of the use of BI 7 Day-Repo Rate on price stability is indicated by the positive relationship between the benchmark interest rate and inflation compared to the BI Rate. The impact of BI 7-Day Repo Rate on economic growth that tends to be positive. Forecasting the use of BI 7-Day Repo Rate shows good results with declining value levels, so this will encourage deepening the financial markets.

scholarly journals Comparison of the impact of lending and inflation rates on economic growth in Vietnam and China

2020 ◽  
Vol 15 (4) ◽  
pp. 193-203
Author(s):  
Doan Van Dinh
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Time Series Data ◽  
Close Correlation ◽  
Least Square ◽  
Series Data ◽  
Lending Rate ◽  
Lending Rates ◽  
The Impact

Inflation and lending rates are two important macroeconomic indicators as they affect economic growth. The correlation between the inflation rate and the lending rate in Vietnam and China is analyzed to determine whether the lending rate causes inflation or not. An ordinary least square model (OLS) and a unit root test are applied to check the correlation and cointegration related to the inflation and lending rates to avoid spurious regression. The research time series data were collected from 1996 to 2017. The correlation of Vietnam’s variables is 56%, the correlation of China’s variables is 55%, which is a close correlation. The empirical cointegration test results for Vietnam and China are suitable for two research models. The relationship between these two indicators influences each other. In the short term, inflation stimulates economic growth through loose monetary policy through the lending rate. However, in the long term, if the money supply increases continuously, inflation will slow economic growth and increase bad debt. The empirical results are to make accurate forecasts and determine monetary policy for micro-managers who set the goal of sustainable economic growth and have a strategy for economic development in the short and long term.

scholarly journals UNEMPLOYMENT AND MONETARY POLICY DYNAMICS IN PAKISTAN: EVIDENCE FROM COINTEGRATION ANALYSIS

2021 ◽  
Vol 9 (1) ◽  
pp. 01-09
Author(s):  
Hina Ali ◽  
Muhammad Zeeshan Ali ◽  
Farhana Nosheen ◽  
Afifa Sadar Ud Din
Keyword(s):  
Monetary Policy ◽  
Price Index ◽  
Time Series Data ◽  
Consumer Price Index ◽  
Development Rate ◽  
Cointegration Analysis ◽  
Series Data ◽  
Policy Dynamics ◽  
Independent Variable ◽  
The Impact

This study examined the impact of monetary policy on unemployment in Pakistan. The time-series data for 1977 to 2019 was taken and the ARDL technique is used for estimation. Unemployment was used as a dependent variable along with other control variables while the money supply was the core independent variable of the research. It was concluded that money related arrangement not just contributes to observing past patterns and additionally future projections of superficial factors of real factors also. The outcomes show that there is a critical and negative connection between spending Deficit and unemployment. The gross domestic product development rate is decidedly identified with unemployment. Populace development rate is adversely identified with unemployment. The consumer price index is contrarily identified with unemployment.

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.

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