How Effective Is Monetary Transmission in Low-Income Countries? A Survey of the Empirical Evidence

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Author/Editor:

Mishra, Prachi | Montiel, Peter

Authorized for Distribution:

June 1, 2012

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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 surveys the evidence on the effectiveness of monetary transmission in low-income countries. It is hard to come away from this review with much confidence in the strength of monetary transmission in such countries. We distinguish between the "facts on the ground" and "methodological deficiencies" interpretations of the absence of evidence for strong monetary transmission. We suspect that "facts on the ground" are an important part of the story. If this conjecture is correct, the stabilization challenge in developing countries is acute indeed, and identifying the means of enhancing the effectiveness of monetary policy in such countries is an important challenge.

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Series:

Working Paper No. 12/143

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Author's keyword(s):

English

Published:	June 1, 2012
		Format:	Paper
Stock No:	WPIEA2012143	Pages:	47
Price:	US$18.00 (Academic Rate: US$18.00 )


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