The Monetary Transmission Mechanism in Jordan

 
Author/Editor: Poddar, Tushar ; Sab, Randa ; Khachatryan, Hasmik
 
Publication Date: February 01, 2006
 
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Summary: This paper examines monetary transmission in Jordan using the vector autoregressive approach. We find that the real 3-month CD rate, the Central Bank's operating target, affects bank retail rates and that monetary policy, measured by the spread between the 3-month CD rate and the U.S. Federal Funds rate, is effective in influencing foreign reserves. We do not find evidence of monetary policy affecting output. Output responds very little to changes in bank lending rates. Furthermore, equity prices and the exchange rate are not significant channels for transmitting monetary policy to economic activity. The effect of monetary policy on the stock market seems insignificant.
 
Series: Working Paper No. 06/48
Subject(s): Monetary policy | Jordan | Bank rates | Foreign exchange reserves | Stock markets | Exchange rates | Economic models

Author's Keyword(s): Jordan | monetary policy | transmission mechanism
 
English
Publication Date: February 01, 2006
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA2006048 Pages: 28
Price:
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