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Author/Editor:
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Cevik, Serhan ; Teksoz, Katerina
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Publication Date:
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July 01, 2012
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Electronic Access:
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Free Full text
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.
The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
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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.
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Series:
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Working Paper No. 12/191
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Subject(s):
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Monetary policy | Inflation | Interest rates on loans | Currency pegs | Bank credit | Economic growth | Economic conditions | Cooperation Council for the Arab States of the Gulf
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Author's Keyword(s):
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Monetary policy transmission | inflation | credit channel | structural VAR |
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