Lost in Transmission? The Effectiveness of Monetary Policy Transmission Channels in the GCC Countries
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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. 2012/191
Subject:
Bank credit Econometric analysis Exchange rate arrangements Exchange rates Foreign exchange Monetary policy Monetary transmission mechanism Money Structural vector autoregression
Frequency:
Annually
English
Publication Date:
July 1, 2012
ISBN/ISSN:
9781475505399/1018-5941
Stock No:
WPIEA2012191
Pages:
35
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