scholarly journals Trilemma to Quadrilemma: An empirical study from Indonesia

2020 ◽  
Vol 18 (2) ◽  
pp. 119-128
Author(s):  
Sri Andaiyani ◽  
Ariodillah Hidayat ◽  
Fida Muthia ◽  
Nona Widharosa ◽  
Mardalena Mardalena
Keyword(s):  
Monetary Policy ◽  
Least Square ◽  
Capital Account ◽  
External Shocks ◽  
Foreign Reserves ◽  
Policy Objective ◽  
Full Sample ◽  
Foreign Reserve ◽  
Ordinary Least Square ◽  
Policy Objectives

The objective of this study is to test the trilemma and the quadrilemma monetary policy using Indonesia data with covering years 1983 – 2017. The research suggest that the monetary independence and capital account openness might have been more passionately pursued by Bank Indonesia for testing the trilemma; while testing of the quadrilemma, the concentration seems to have shifted to take a middle position within each policy objectives. In this study, the full sample period is split in three subsamples: 1983-2017, 1983 – 1999 and 2000 – 2017. The methodology used in this research is ordinary least square. Our findings show that the policy might have shifted from exchange rate stability, capital account openness and foreign reserves in the first subsample to other four policy objectives in the second subsample. It indicates that foreign reserve plays as fourth objective leading the central bank to achieve at the same time the three “impossible” goals. Therefore, taking into account foreign reserve as a monetary policy objective is deserved. Adequacy of reserves could higher our capacity to prevent or mitigate external shocks.

A First Look at the Trilemma Vis-à-Vis Quadrilemma Monetary Policy Stance in a Pacific Island Country Context

2018 ◽  
Vol 21 (01) ◽  
pp. 1850002
Author(s):  
Jen Je Su ◽  
Lavenia Cocker ◽  
Disusu Delana ◽  
Parmendra Sharma
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Policy Implications ◽  
Capital Account ◽  
Pacific Island ◽  
Sample Period ◽  
Foreign Reserves ◽  
Full Sample ◽  
Pacific Island Country ◽  
Monetary Independence

Initiated by a central bank, this is the first study to examine and understand the trilemma as well as the quadrilemma monetary policy challenges in the case of Pacific Island countries. Taking Fiji as an example, over the 1975–2013 period, the trilemma, monetary independence and exchange rate stability might have been the more fervently pursued stance; the quadrilemma focus appears to have shifted to foreign reserves and capital account openness. When the full sample period is split into two subsamples, results show that the policy emphasis might have shifted from monetary independence, capital account openness, and foreign reserves to exchange rate stability, monetary independence, and foreign reserves. Policy implications are discussed.

scholarly journals A Review of the Impact of External Shocks on Monetary Policy Effectiveness in Non-WAEMU Countries

2021 ◽  
Vol 31 (3) ◽  
pp. 37-59
Author(s):  
Kordzo Sedegah ◽  
Nicholas M. Odhiambo
Keyword(s):  
Monetary Policy ◽  
Foreign Aid ◽  
Capital Account ◽  
External Shocks ◽  
Foreign Reserves ◽  
Policy Effectiveness ◽  
Exchange Rate Flexibility ◽  
Monetary Policy Effectiveness ◽  
The Impact ◽  
Effectiveness Of Monetary Policy

Abstract In this paper, the extant literature on the impact of external shocks on monetary policy effectiveness with reference to non-WAEMU countries is reviewed. The importance of this literature review is to provide contemporary perspectives to scholars and policymakers on the relevance of the incidence of external shocks to the effectiveness of monetary policy with reference to non-WAEMU countries. The literature reviewed in this study shows that, on the whole, the extent and the degree to which external shocks are transmitted to the domestic economy substantially depend on a plethora of features, namely the absence of exchange rate flexibility; a strong export concentration, especially with respect to commodities; the level of global economic integration; restricted capacities of production; the absence of competitiveness in exports; over-reliance on foreign aid; foreign reserves that are not adequate and capital account openness.

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

scholarly journals Does Monetary Policy Affect Economic Growth in Jordan? Evidence from Ordinary Least Square Models

2018 ◽  
Vol 12 (1) ◽  
pp. 27
Author(s):  
Mohamed Ibrahim Mugableh
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Positive Impact ◽  
Least Square ◽  
Vector Error Correction ◽  
Ordinary Least Square ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run

The main objective of this paper is to analyze equilibrium and dynamic causality relationships between monetary policy tools and economic growth in Jordan for the period (1990-2017). For this purpose, it considers the autoregressive distributed lag (ARDL) and vector error correction (VEC) models estimations. The results of ARDL approach show that monetary policy variables (i.e., real interest rate and money supply) have positive impact on economic growth in long-run and short-run except inflation rate. In addition, the results of VECM indicate bidirectional causal relationships between economic growth and monetary policy variables in long-run and short-run.

scholarly journals Alleviating Poverty in Nigeria: Keynesian Vs Monetary Theory of Poverty

2020 ◽  
Vol 30 (1) ◽  
pp. 103-120
Author(s):  
Olukayode Emmanuel Maku ◽  
Afeez Taiwo Tella ◽  
Akinola Christopher Fagbohun
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Capital Expenditure ◽  
Vital Role ◽  
Least Square ◽  
Monetary Policies ◽  
Ordinary Least Square ◽  
Beta Coefficient ◽  
Policy Measures

AbstractThis study comparatively investigates the impacts of fiscal and monetary policies on poverty in Nigeria from 1986 to 2018. Using the Ordinary Least Square and Standardized or Beta Coefficient approach, we found that the Nigerian political system plays a vital role on a large number of its citizens living in extreme poverty. Other factors identified as the likely causes of poverty are insurgencies, terrorism, and low productivity among others. Also, monetary policy is more important in alleviating poverty than the fiscal policy which favored the monetary school arguments. Specifically, monetary measures like exchange rate and interest rate are more significant in alleviating poverty far more than inflation rate while fiscal measures proxy with government recurrent expenditure plays a more vital role in alleviating poverty in Nigeria than others like government capital expenditure and government recurrent expenditure. The study recommended that in the case of monetary measures, there is a need for Government through the Central Bank of Nigeria, to shift their attention towards key monetary policy measures like interest rate and exchange rate compare to other monetary measures.

The Effect of Monetary Policy on the Nigerian Deposit Money Bank System

2014 ◽  
Vol 3 (1) ◽  
pp. 39-52
Author(s):  
Alex Ehimare Omankhanlen
Keyword(s):  
Monetary Policy ◽  
Regulatory Authority ◽  
Banking System ◽  
Least Square ◽  
Ordinary Least Square ◽  
Independent Variables ◽  
Effect Of Monetary Policy ◽  
Bank System ◽  
Reserve Ratio ◽  
Nigerian Banking

This study investigates the effect of monetary policy on the Nigerian Deposit Money Bank (DMB) System. The Nigerian banking system is currently under-going a series of reforms in order to enhance its competitiveness and efficiency. The Ordinary Least Square (OLS) method is used to examine the effect of monetary policy on the Nigerian Deposit Money Bank System, using such variables as total loans and advances (TLA) as dependent variable and liquidity ratio (LR),cash reserve ratio (CRR), monetary policy rate (MPR), and average exchange rate (AER) as independent variables. The result of the findings shows that monetary policy rate reveal the most significant effect on commercial banks loans and advances during the period under study. The study thus recommends, among others, that the regulatory authority Central Bank of Nigeria should create credit procedures, policies and analytical capabilities which should be entrenched in the credit management of DMB's operations.

scholarly journals DAMPAK KEBIJAKAN MONETER PADA OUTPUT DI NEGARA-NEGARA ASENA TAHUN 1980-2014

2019 ◽  
Vol 4 (1) ◽  
pp. 58-70
Author(s):  
Nur Widiastuti
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Empirical Studies ◽  
Negative Relationship ◽  
The State ◽  
Least Square ◽  
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.

scholarly journals ANALISIS PASAR BARANG DAN PASAR UANG DI INDONESIA : PENDEKATAN KEBIJAKAN FISKAL DAN KEBIJAKAN MONETER

2018 ◽  
Vol 7 (2) ◽  
pp. 121
Author(s):  
Siska Rahmi ◽  
Ali Anis ◽  
Dewi Zaini Putri
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Interest Rate ◽  
Least Square ◽  
Fiscal Multiplier ◽  
Ordinary Least Square ◽  
Effective Policy ◽  
The Interest Rate ◽  
Equilibrium Market ◽  
Research Show

This study aims to analyze the (1) multiplier of fiscal policy and monetary policy, (2) equilibrium market of goods and money market in Indonesia, (3) effective policy to stabilize Indonesian economy by using Ordinary Least Square (OLS) method. The results of the research show that (1) a fiscal multiplier is 0.06 and a monetary multiplier is 1.17, (2) the equilibrium is at the interest rate of 1,81% and the GDP of Rp. 935.235,6 billion, and (3) the effective policy is monetary policy in stabilizing the economy.

External Monetary Constraints Imposed by Developed Economies on Developing Economies: Empirical Evidence from Pakistan

2019 ◽  
pp. 8-28
Author(s):  
Muhammad Ali Rizwan ◽  
Muhammad Zeeshan Younas ◽  
Hafiza Sadaf Zahra
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Developing Economies ◽  
Oil Price ◽  
External Shocks ◽  
Price Shocks ◽  
Developed Economies ◽  
Policy Objectives ◽  
Macro Variables ◽  
Global Food

The problem with the most of the developing economies is that their monetary policy is constrained by external shocks and developed economies central banks especially FED and ECB. In this research, we examine the effects of major external shocks like global oil price shocks, foreign interest rate shocks and global food price shocks on the major macro variables of Pakistan which creating hurdles for the SBP to achieve its monetary policy objectives independently. The results stating that the global oil price and global food price shocks have direct impacts on the major macro variables of Pakistan and put inflationary pressure on the Pakistan economy which making difficult for the central bank to achieve its predetermined dual objective of monetary policy i.e. full employment and stable inflation. Additionally, we examine how the changes in US monetary policy effects Pakistan economy and find that positive foreign interest rate shock has minor impacts on the major macro variables of Pakistan except for the exchange rate and domestic inflation rates which is also imposing an external constraint on the monetary policymaking process of Pakistan central bank. In a nutshell, all these external shocks are creating hurdles and imposing monetary constraints on the Pakistan which making difficulties for Pakistani central bank to achieve its monetary policy objectives.

scholarly journals Macroeconomic Impacts of Monetary Variables on Pakistan’s Foreign Sector

2004 ◽  
Vol 9 (1) ◽  
pp. 63-84
Author(s):  
M. Aslam Chaudhary ◽  
Ghulam Shabbir
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Null Hypothesis ◽  
Price Level ◽  
Real Income ◽  
Balance Of Payments ◽  
Foreign Reserves ◽  
Foreign Reserve ◽  
Domestic Credit ◽  
The Impact

This study examines the impact of monetary variables on the balance of payments of Pakistan. Besides, exogoneity of monetary variables is also tested. The empirical findings of the study show that balance of payments is a monetary phenomenon and monetary policy could be useful in improving the foreign sector. The studies so far have not confirmed this effect. The study also shows that an increase in price level and real income lead foreign reserves to inflow. However, an increase in the interest rate, money multiplier and domestic credit lead international reserves to outflow. Partial sterilisation was evident in the short run. But in the long run, it tends to be equal to minus one, indicating no sterilisation effect on the foreign reserve movements. The central implication derived from the study is that an increasing government budget deficit leads to excessive expansion in domestic credit creation and as a result a loss of foreign reserves. The null hypothesis for exogoneity of price level, real income, interest rate and inflation rate to foreign reserves is accepted. However, the null hypothesis for the exogoneity of domestic credit is rejected for the general model but accepted for the linear model. It appears that monetary policy is effective in Pakistan

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