Lost in Transmission? The Effectiveness of Monetary Policy Transmission Channels in the GCC Countries

Author/Editor:

Serhan Cevik ; Katerina Teksoz

Publication Date:

July 1, 2012

Electronic Access:

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Summary:

This paper empirically investigates the effectiveness of monetary policy transmission in the Gulf Cooperation Council (GCC) countries using a structural vector autoregressive model. The results indicate that the interest rate and bank lending channels are relatively effective in influencing non-hydrocarbon output and consumer prices, while the exchange rate channel does not appear to play an important role as a monetary transmission mechanism because of the pegged exchange rate regimes. The empirical analysis suggests that policy measures and structural reforms - strengthening financial intermediation and facilitating the development of liquid domestic capital markets - would advance the effectiveness of monetary transmission mechanisms in the GCC countries.

Series:

Working Paper No. 12/191

Subject:

Frequency:

Annually

English

Publication Date:

July 1, 2012

ISBN/ISSN:

9781475505399/1018-5941

Stock No:

WPIEA2012191

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

35

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