The Transmission of Monetary Policy in Israel

Author/Editor:

Fiorella De Fiore

Publication Date:

August 1, 1998

Electronic Access:

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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

Summary:

This paper investigates the transmission of Israeli monetary policy since 1990. Two issues are addressed: the extent to which monetary policy exerts real effects, and the relative importance of different transmission channels. The impact of monetary restraints on aggregate industrial production is found to be small, although industrial sectors open to trade appear to suffer to a larger extent than closed sectors. Three transmission channels are analyzed by comparing the empirical evidence to that predicted by theory. While the credit and exchange rate channels may be important mechanisms of transmission, the interest rate channel finds weak support in the data.

Series:

Working Paper No. 1998/114

Subject:

Bank credit Credit Currencies Exchange rates Financial services Foreign exchange Industrial production Money Production Real interest rates

Frequency:

Annually

English

Publication Date:

August 1, 1998

ISBN/ISSN:

9781451943504/1018-5941

Stock No:

WPIEA1141998

Pages:

45

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