The Monetary Transmission Mechanism in Jordan
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
This paper examines monetary transmission in Jordan using the vector autoregressive approach. We find that the real 3-month CD rate, the Central Bank's operating target, affects bank retail rates and that monetary policy, measured by the spread between the 3-month CD rate and the U.S. Federal Funds rate, is effective in influencing foreign reserves. We do not find evidence of monetary policy affecting output. Output responds very little to changes in bank lending rates. Furthermore, equity prices and the exchange rate are not significant channels for transmitting monetary policy to economic activity. The effect of monetary policy on the stock market seems insignificant.
Series:
Working Paper No. 2006/048
Subject:
Bank credit Deposit rates International reserves Monetary transmission mechanism Stock markets
English
Publication Date:
February 1, 2006
ISBN/ISSN:
9781451863086/1018-5941
Stock No:
WPIEA2006048
Pages:
28
Please address any questions about this title to publications@imf.org