scholarly journals Monetary Policy and the Real Economy: A Study of the Manufacturing and Services Sectors in Nigeria

2019 ◽  
pp. 1-13
Author(s):  
Olumuyiwa Olamade
Keyword(s):  
Monetary Policy ◽  
Value Added ◽  
Annual Data ◽  
Real Sector ◽  
Real Economy ◽  
The Real ◽  
Development Indicators ◽  
Distributed Lag ◽  
Domestic Credit ◽  
Effect Of Monetary Policy

This study examined the effect of monetary policy on the real sector of the Nigerian economy. A model was specified for each of the manufacturing and services sectors to interrogate the effect of monetary policy on the real sector. Annual data were sourced from the World Development Indicators for 1981 to 2017. Preliminary tests of the time series properties suggested the autoregressive distributed lag (ARDL) regression as the most appropriate framework for the achievement of our objectives. Diagnostic tests of the distribution of regression errors confirmed the satisfaction of all necessary regression assumptions. The models were also found stable over the study period. Thus, the models adequately represented the problems formulated for investigation and good for valid inference. While all the four channels of monetary transmission considered were found significant for value-added expansion in manufacturing, the exchange rate channel was not a significant factor in value-added change in the services sector. Our findings suggested that domestic credit is the dominant channel for the transmission of monetary impulses to the real sector. The study concluded that monetary policy will benefit the real economy more with export expansion in both the manufacturing and services sectors.

scholarly journals The effect of the ECB’s conventional monetary policy on the real economy: FAVAR-approach

2019 ◽  
Vol 59 (6) ◽  
pp. 2899-2924 ◽  
Author(s):  
Olli-Matti Juhani Laine
Keyword(s):  
Monetary Policy ◽  
Unemployment Rate ◽  
Industrial Production ◽  
Real Economy ◽  
Vector Autoregressive Models ◽  
Vector Autoregressive ◽  
The Real ◽  
European Central ◽  
Monetary Policy Effectiveness ◽  
Effect Of Monetary Policy

AbstractThis study applies factor-augmented vector autoregressive models to investigate the effect of the European Central Bank’s (ECB) conventional monetary policy on the real economy. More specifically, the study examines how unanticipated changes in the ECB’s policy rate have affected unemployment rate and industrial production. The effect of monetary policy on unemployment rate and industrial production is estimated to be strong and statistically significant using the data from January 1999 to July 2017 or from the pre-crisis period. However, after the beginning of the crisis the responses weaken drastically and become sometimes statistically insignificant, indicating that the effect of the ECB’s conventional monetary policy became weaker after the financial crisis. This finding is extremely interesting because one could presume either weaker or stronger effect based on economic theory. Additionally, the previous studies that have analysed the possible changes in the monetary policy effectiveness in the euro area have not found any changes (e.g. Bagzibagli in Empir Econ 47(3):781–823, 2014; Von Borstel et al. in Int J Money Finance 68:386–402, 2016).

Non-performing loans and monetary policy dynamics in Ghana

2019 ◽  
Vol 10 (2) ◽  
pp. 169-184 ◽  
Author(s):  
Rexford Kweku Asiama ◽  
Anthony Amoah
Keyword(s):  
Monetary Policy ◽  
Annual Data ◽  
Content Type ◽  
Quarterly Data ◽  
Distributed Lag ◽  
Long Run ◽  
Policy Dynamics ◽  
Short Run ◽  
Private Savings ◽  
Effect Of Monetary Policy

Purpose The sharp rise in non-performing loans (NPLs) with its associated effect on financial institutions in Ghana has become very alarming. This has led to the collapse of distressed institutions and associated repercussions such as loss of private savings, investments, businesses and livelihoods. The purpose of this paper is to test the hypothesis that the monetary policy rate can be used to influence NPLs in Ghana. Design/methodology/approach Using quarterly data spanning from 2000 to 2016, the authors used the autoregressive distributed lag econometric approach to estimate the effect of monetary policy on the percentage growth of NPLs in Ghana. The results are presented for both short-run and long-run periods. Findings In the short run, the authors find evidence of no statistically significant effect of monetary policy on the percentage growth of NPLs. However, in the long run, the authors find a statistically significant effect of monetary policy on the percentage growth of NPLs. Practical implications The authors recommend that policymakers should focus on building a strong financial environment, so that monetary policy can be used to influence the commercial bank’s interest rate. In effect, this will help reduce the growth of NPLs, reduce risk and attract competitors into the financial market, increase asset base, increase credit to support viable ventures and subsequently boost economic growth in Ghana. Originality/value The paper shows its value by using quarterly data whereas most literature have considered annual data. Also, the paper includes a policy variable measured by the Monetary Policy Rate (MPR) as the key variable of interest which is normally not the case with most studies.

Global Financial Crisis and Its Impact on Russia

2009 ◽  
pp. 9-27 ◽  
Author(s):  
A. Kudrin
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Financial Crisis ◽  
Central Bank ◽  
Global Financial Crisis ◽  
Developed Countries ◽  
Real Economy ◽  
Energy Prices ◽  
Russian Government ◽  
The Real

The article examines the causes of origin and manifestation of the current global financial crisis and the policies adopted in developed countries in 2007—2008 to deal with it. It considers the effects of the financial crisis on Russia’s economy and monetary policy of the Central Bank in the current conditions as well as the main guidelines for the fiscal policy under different energy prices. The measures for fighting the crisis that the Russian government and the Central Bank use to support the real economy are described.

Reducing the Risks of the Financial Sector to Ensure Sustainable Growth of the Russian Еconomy

2019 ◽  
Vol 12 (3) ◽  
pp. 86-92
Author(s):  
T. I. Minina ◽  
V. V. Skalkin
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Financial Sector ◽  
Developed Countries ◽  
Sustainable Growth ◽  
Necessary Condition ◽  
Real Sector ◽  
Financial Instruments ◽  
The Real ◽  
The Impact

Russia’s entry into the top five economies of the world depends, among other things, on the development of the financial sector, being a necessary condition for the economic growth of a developed macroeconomic and macro-financial system. The financial sector represents a system of relationships for the effective collection and distribution of economic resources, their deployment according to public demand, reducing the risk of overproduction and overheating of the economy.Therefore, the subject of the research is the financial sector of the Russian economy.The purpose of the research was to formulate an approach to alleviating the risks of increasing financial costs in the real sector of the economy by reducing the impact of endogenous risks expressed as financial asset “bubbles” using the experience of developed countries in the monetary policy.The paper analyzes a macroeconomic model applied to the financial sector. It is established that the economic growth is determined by the growth and, more important, the qualitative development of the financial sector, which leads to two phenomena: overproduction in the real sector and an increase in asset prices in the financial sector, with a debt load in both the real and financial sectors. This results in decreasing the interest rate of the mega-regulator to near-zero values. In this case, since the mechanisms of the conventional monetary policy do not work, the unconventional monetary policy is used when the mega-regulator buys out derivative financial instruments from systemically important institutions. As a conclusion, given deflationally low rates, it is proposed that the megaregulator should issue its own derivative financial instruments and place them in the financial market.

scholarly journals A Long Run ARDL Investigation of Manufacturing Adjustment to the Services Economy in Nigeria

2021 ◽  
Vol 9 (3) ◽  
pp. 95-107
Author(s):  
Olumuyiwa Olamade
Keyword(s):  
Capital Accumulation ◽  
Negative Impact ◽  
Manufacturing Sector ◽  
Value Added ◽  
Business Services ◽  
Development Indicators ◽  
Services Sector ◽  
Positive Effects ◽  
Distributed Lag ◽  
Long Run

The long-run equilibrating relationship between the value-added growth of services and manufacturing is investigated in this research. The study is based on the well-established empirical link between manufacturing and service activities, and in particular, manufacturing's servicification. The selected variables' annualized time series were obtained from the World Development Indicators. The paper used the autoregressive distributed lag framework to regress manufacturing value-added growth against service value-added growth while accounting for economic growth, factor input growth, and trade effects. The findings revealed that in Nigeria, a strong performing services sector has a large negative impact on manufacturing performance, whereas capital accumulation and income growth have positive effects. The supply constraint of business services that the manufacturing sector requires is at the root of this finding. The paper advocates for policy frameworks that support the efficient supply of business services as both a manufacturing input and a productivity enhancer for the entire economy.

scholarly journals The Monetary Policy in Indonesia: in the Perspective of Islamic Economics

2017 ◽  
Vol 5 (1) ◽  
pp. 59-74
Author(s):  
Iwan Wisandani ◽  
Sri Iswati ◽  
Rifki Ismal
Keyword(s):  
Monetary Policy ◽  
Comparative Study ◽  
Research Result ◽  
Transmission Model ◽  
Observational Result ◽  
Real Sector ◽  
The Real ◽  
Literary Research

The writing is based on my concern on the monetary policy in Indonesia which is not fully in accordance with the Islamic teaching. Among all, the monetary policy doesn’t pay attention to the real sector. It can be seen from the sectorial dichotomy between the real and monetary sectors whereas in Islamic economics, monetary policy is only a representative of the real sector. The paper is a literary research with the approach of comparative study between Islamic monetary policy and the monetary policy employed in Indonesia. The research result is a composition of a transmission model from the perspective of Islamic economics which is based on BI Return (sharing) by creating a diagram and then explaining some thoughts of Muslim and western economists such as Stieglitz to create a monetary policy which gets along with the real sector. The model is an observational result to the monetary condition in Indonesia which is then compared to Islamic monetary thought. This model will gain good result when all transmissions of monetary policy are applied effectively.

scholarly journals The Application of Time-Delay-DependentH∞Control in the Transmission Effect of Monetary Policy on Real Estate Market

2014 ◽  
Vol 2014 ◽  
pp. 1-6
Author(s):  
Haifeng Guo ◽  
Yu Qian ◽  
Bo Wang ◽  
Yi Qiu
Keyword(s):  
Monetary Policy ◽  
Time Delay ◽  
Real Estate ◽  
Real Estate Market ◽  
The Real ◽  
The Real Estate ◽  
Transmission Effect ◽  
The Real Estate Market ◽  
Effect Of Monetary Policy ◽  
Delay Dependent

This paper uses a time-delay-dependentH∞control model to analyze the transmission effect of monetary policy on the real estate market. We establish a theoretical framework between monetary policy and real estate market based on the three channels, that is, interest rate channel, monetary supply channel, and credit channel. Then we construct a basic model usingH∞control method. By analyzing the effect of the time-delay characteristics of monetary policy on the real estate market, we introduce time variables and propose a time-delay-dependentH∞control model. We test the robustness of the model using the Chinese data of the monetary policy and the real estate market and prove that this model can be well employed in the reality.

scholarly journals ROLE OF THE FINANCIAL SECTOR IN FINANCING THE ENTERPRISES OF THE REAL SECTOR OF THE ECONOMY

2018 ◽  
pp. 78-84
Author(s):  
Dmytro Malysh
Keyword(s):  
Stock Market ◽  
Interest Rates ◽  
Banking Sector ◽  
Financial Sector ◽  
Bank Loans ◽  
Positive Trend ◽  
Real Sector ◽  
Real Economy ◽  
The Real

Introduction. Financial sector plays an important role in the financing of business entities in the real economy sector. A possibility of rising funds through the stock or banking sector enables substantially to expand the scope of enterprises. However, the presence of permanent financial crises does not allow companies to use these opportunities in full. Therefore, the assessment of state and trends of the stock and banking sectors in the context of the use of their funds to finance companies in the real sector of the economy becomes important. Purpose. The article aims to identify contemporary issues of development of the stock and banking sectors in the context of their ability to finance companies in the real economy. Method. In order to achieve the goal of the research we have used the following methods: method of structural and dynamic analysis and method of economic and statistical analysis of the development of the stock and banking sectors of Ukraine. Results. It has been determined that the deterioration of the stock market in Ukraine led to its exclusion from the list of marginal markets. The largest segment of the Ukrainian stock and banking sector services the issuers, which are owned by the state. At the same time, the financial sector has features of bank-centeredness since banks play a leading role in financing of companies and in transactions of the stock market. Ukrainian stock market mainly carries out operations with government bonds and only a small part of operations provides financing for the activities of companies through the issue of stocks and bonds. The share of long-term sources of funding is gradually decreasing and it is critically low for economic growth of the country. The tempos of providing long-term and short-term bank loans for the company are slowing down. A positive trend is the reduction of interest rates on loans. There is a need to develop effective measures for using opportunities of the stock and banking sectors as well for financing companies in the real sector of the economy.

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