scholarly journals Assessing the efficiency of the monetary transmission mechanism channels in Ukraine

2021 ◽  
Vol 16 (3) ◽  
pp. 48-62
Author(s):  
Volodymyr Mishchenko ◽  
Svitlana Naumenkova ◽  
Svitlana Mishchenko
Keyword(s):  
Interest Rate ◽  
Open Economy ◽  
Small Open Economy ◽  
Transmission Mechanism ◽  
Monetary Transmission ◽  
Monetary Transmission Mechanism ◽  
Market Participants ◽  
Real Gdp ◽  
Gdp Growth Rate

The paper is focused on the performance features of the monetary transmission mechanism (MTM) in Ukraine as a small open economy. To assess the efficiency of monetary transmission channels, it is important to disclose their interaction, define criteria and tools for analyzing their impact on key macroeconomic parameters. The study deepens approaches to the analysis of the intensity of using monetary, credit, interest rate and exchange rate channels in Ukraine in 2005–2020 and detects violations in the functioning of the MTM. Using economic and statistical methods and regression models, the influence of the main channels of monetary transmission on real GDP growth rate and inflation in Ukraine was assessed. It was concluded that it is advisable to clarify the conditions for increasing the efficiency of MTM in Ukraine; also, the parameters of forecasting the intensification of its channels in the medium and long term are determined. The paper highlights measures to improve the formation of volume and structure of the monetary base and monetary aggregates, improve credit and investment climate, and increase the efficiency of monetary regulation. Moreover, interest rate and foreign exchange policies of the central bank to transmit impulses from the decisions of monetary authorities to market participants were substantiated.

CHARACTERIZING THE MONETARY TRANSMISSION MECHANISM IN A SMALL OPEN ECONOMY: THE CASE OF MALAYSIA

2003 ◽  
Vol 48 (02) ◽  
pp. 113-134 ◽  
Author(s):  
WEE BENG GAN ◽  
LEE YING SOON
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Interest Rates ◽  
Open Economy ◽  
Small Open Economy ◽  
Policy Instrument ◽  
Transmission Mechanism ◽  
Monetary Transmission ◽  
Impulse Response Functions ◽  
Monetary Transmission Mechanism

This paper evaluates the monetary policy response of Malaysia's central bank and the nature of monetary transmission mechanism in the 1990s when the exchange rate was on a managed float and the capital account was open. Structural vector autogression analysis is employed to evaluate how the central bank sets short term interest rates taking into consideration the constraints faced in adjusting the policy instrument to shocks to the economy. The impulse response functions and the variance decomposition indicate that the central bank preferred to use foreign exchange intervention rather than interest rate to stabilize the ringgit exchange rate. The results suggest that a sustained high level of interest rates would have caused a prolonged and deep contraction in output during the East Asian financial crisis.

scholarly journals The Monetary Transmission Mechanism: An Empirical Framework

1995 ◽  
Vol 9 (4) ◽  
pp. 11-26 ◽  
Author(s):  
John B Taylor
Keyword(s):  
Interest Rates ◽  
Rational Expectations ◽  
Transmission Mechanism ◽  
Monetary Transmission ◽  
Market Prices ◽  
Policy Rules ◽  
Monetary Transmission Mechanism ◽  
Real Gdp ◽  
The Impact

This paper provides an overview of the monetary transmission mechanism describing the impact of changes in monetary policy on real GDP. Changes in financial market prices--including long-term interest rates and exchange rates--are the main vehicle for the transmission of policy. The framework incorporates rational expectations and policy rules. It is empirical and appears to fit the facts well.

scholarly journals ALUR TRANSMISI DAN EFEKTIFITAS KEBIJAKAN MONETER GANDA DI INDONESIA

2012 ◽  
Vol 14 (3) ◽  
pp. 283-315
Author(s):  
Ascarya Ascarya
Keyword(s):  
Interest Rate ◽  
Central Bank ◽  
Negative Impact ◽  
Transmission Mechanism ◽  
Monetary Transmission ◽  
Monetary Transmission Mechanism ◽  
Monetary System ◽  
Data Form ◽  
Pass Through ◽  
The Interest Rate

This study aims to investigate transmission mechanism of dual monetary system from conventional and Islamic policy rates to inflation and output using Granger and VAR methods on monthly Indonesian banking data form January 2003 to December 2009. The result shows that conventional transmission mechanismsfrom conventional policy rate are all linked tooutput and inflation, while Islamic policy rate are not linked to output and inflation.In addition, the interest rate, credit and conventional interbank rate shocks give negative and permanent impacts to inflation and output, while PLS, financing and Islamic interbank PLS, as well as SBIS(Central Bank Shariah Certificate) as Islamic policy rate shocks give positive and permanent impacts to inflation and output. SBI (Central Bank Certificate) as conventional policy givespositive impact to inflation and negative impact to output.Keywords: Monetary transmission mechanism, Interest rate pass through, Conventional Banking, Islamic BankingJEL Classification: E43, E52, G21, G28

Dynamism of Monetary Transmission Mechanism in Nigeria: Interest Rate and Market Capitalization Causality Evidence

2018 ◽  
Vol 2 (1) ◽  
pp. 81-91
Author(s):  
Prince Umor C. Agundu ◽  
Waleru Henry Akani
Keyword(s):  
Interest Rate ◽  
Granger Causality ◽  
Granger Causality Test ◽  
Transmission Mechanism ◽  
Monetary Transmission ◽  
Coefficient Of Determination ◽  
Series Data ◽  
Causality Test ◽  
Market Capitalization ◽  
Monetary Transmission Mechanism

The potency of monetary transmission channels anchors the process by which interest rate movements and other cardinal aggregates influence critical financial fundamentals in an economy. This study, thus, examines dynamism of the monetary transmission mechanism with focus on the causality of interest rate and market capitalization in the Nigerian economy. Time series data covering a period of 36 years (1981 - 2015) were extracted from publications of monetary authorities and related agencies, including annual reports of Deposit Money Banks (DMBs) in the country. Facilitated by E-Views software, the analytical proceedings generated the required statistical outcomes in terms of coefficient of correlation (r), coefficient of determination (R2), t-statistic, and F-statistic. Granger causality test was also conducted to clearly establish the direction of causality between the focal variables. Essentially, the null hypothesis is rejected as probability of the F-statistic is less than the specified 0.05 level of significance. The granger causality test statistics run from four interest rate components to the operational capital market fundamental (with F-statistics of 5.758, 5.540, 4.209,and5.656; as well as  probability values of 0.008, 0.009, 0.002, and 0.009 respectively). In view of the analytical outcomes, it is recommended that interest rate components be efficiently synergized to boost investors’ confidence and further drive monetary policy dynamics towards greater financial system vitality and sustainability in Nigeria.

scholarly journals TRANSMISSION CHANNEL AND EFFECTIVENESS OF DUAL MONETARY POLICY IN INDONESIA

2012 ◽  
Vol 14 (3) ◽  
pp. 269-298 ◽  
Author(s):  
Ascarya Ascarya
Keyword(s):  
Interest Rate ◽  
Positive Impact ◽  
Transmission Mechanism ◽  
The Other ◽  
Monetary Transmission ◽  
Transmission Channel ◽  
Monthly Data ◽  
Monetary Transmission Mechanism ◽  
Monetary System ◽  
Pass Through

This paper investigates the transmission mechanism of dual monetary system from conventional and Islamic policy rates to inflation and output. We apply Granger Causality and VAR methods on monthly data of Indonesian banking, during the period of January 2003 to December 2009. The result shows that conventional policy rate is transmitted to output and inflation, while Islamic policy rate are not. In addition, the shock of conventional interest rate, credit and interbank rate give a negative and permanent impacts on inflation and output, except for SBI (Certificate of Bank Indonesia) with positive impact to inflation  though negatively affect the output. On the other hand, the shock of PLS, financing and Islamic interbank PLS, as well as SBIS (Central Bank Shariah Certificate) give positive and permanent impacts on inflation and output. Keywords: Monetary transmission mechanism, Interest rate pass through, Conventional Banking, Islamic BankingJEL Classification: E43, E52, G21, G28

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