## Monetary Policy Effectiveness in Kazakhstan: Results With a Small Macro Model

_IMF Working Papers, August 29, 2025_

## Source details

**Canonical URL:** [Monetary Policy Effectiveness in Kazakhstan: Results With a Small Macro Model](https://www.imf.org/en/publications/wp/issues/2025/08/29/monetary-policy-effectiveness-in-kazakhstan-results-with-a-small-macro-model-568450)

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## Bibliographic details
- Authors: Gregorio Impavido
- Published: August 29, 2025
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229016988.001

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### Overview
- Author: Gregorio Impavido
- Date: August 29, 2025
- Publication: IMF Working Papers
- Key statement: Monetary policy effectiveness has increased over time.
- Abstract summary: This paper assesses the effectiveness of monetary policy in Kazakhstan using a small macro model and identifies alternative plausible economic structures consistent with priors on the sign of responses of macro variables to structural shocks.

### Methodology
- Model type:
  - Small macro model
  - Structural vector autoregression (SVARs)
- Identification approach:
  - Uses priors on the sign of responses of macro variables to structural shocks
  - Employs sign restriction / sign restrictions and parametric restrictions where applicable
- Key variables analyzed:
  - Central bank policy rate
  - Inflation
  - Output gap
  - Prices
  - Production
  - Financial services

### Main Findings
- Monetary policy effectiveness has increased over time.
- The analysis identifies alternative plausible economic structures that are consistent with priors on the sign of responses of macro variables to structural shocks.
- The study uses summary statistics and SVARs to evaluate responses of:
  - Central bank policy rate
  - Inflation
  - Output gap
  - Prices
  - Production

### Policy-Relevant Implications (inferred from study focus and findings)
- Strengthened monetary policy transmission in Kazakhstan over time implies:
  - Greater potential effectiveness of central bank policy rate adjustments for influencing inflation and output gap.
  - Relevance of ongoing monitoring of transmission channels including prices, production, and financial services.
- Use of sign-restriction SVARs and small macro models can help central banks evaluate robustness of monetary policy effects under alternative plausible economic structures.

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## Content in this bundle

- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2025/08/29/monetary-policy-effectiveness-in-kazakhstan-results-with-a-small-macro-model-568450_