Monetary Policy Transmission Heterogeneity Cross Country Evidence

Author : Mr. Pragyan Deb
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 59 pages
Book Rating : 4.22/5 ( download)

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Download or read book Monetary Policy Transmission Heterogeneity: Cross-Country Evidence written by Mr. Pragyan Deb and published by International Monetary Fund. This book was released on 2023-10-17 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper revisits the transmission of monetary policy by constructing a novel dataset of monetary policy shocks for an unbalanced sample of 33 advanced and emerging market economies during the period 1991Q2-2023Q2. Our findings reveal that tightening monetary policy swiftly and negatively impacts economic activity, but the effects on inflation and inflation expectations takes time to fully materialize. Notably, there exist significant heterogeneities in the transmission of monetary policy across countries and time, depending on structural characteristics and cyclical conditions. Across countries, monetary policy is more effective in countries with flexible exchange rate regime, more developed financial systems, and credible monetary policy frameworks. In addition, we find that monetary policy transmission is stronger when uncertainty is low, financial conditions are tight and monetary policy is coordinated with fiscal policy—that is, when the stances move in the same direction.

Author : Mr.Luis Brandao-Marques
Publisher : International Monetary Fund
ISBN 13 : 1513529730
Total Pages : 54 pages
Book Rating : 4.38/5 ( download)

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Download or read book Monetary Policy Transmission in Emerging Markets and Developing Economies written by Mr.Luis Brandao-Marques and published by International Monetary Fund. This book was released on 2020-02-21 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: Central banks in emerging and developing economies (EMDEs) have been modernizing their monetary policy frameworks, often moving toward inflation targeting (IT). However, questions regarding the strength of monetary policy transmission from interest rates to inflation and output have often stalled progress. We conduct a novel empirical analysis using Jordà’s (2005) approach for 40 EMDEs to shed a light on monetary transmission in these countries. We find that interest rate hikes reduce output growth and inflation, once we explicitly account for the behavior of the exchange rate. Having a modern monetary policy framework—adopting IT and independent and transparent central banks—matters more for monetary transmission than financial development.

Author : Ignazio Angeloni
Publisher : Cambridge University Press
ISBN 13 : 9780521828642
Total Pages : 398 pages
Book Rating : 4.43/5 ( download)

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Download or read book Monetary Policy Transmission in the Euro Area written by Ignazio Angeloni and published by Cambridge University Press. This book was released on 2003-12-04 with total page 398 pages. Available in PDF, EPUB and Kindle. Book excerpt: A systematic analysis of the impact of European Central Bank monetary policy on Eurozone national economies, first published in 2003.

Author : Davide Furceri
Publisher : International Monetary Fund
ISBN 13 : 1475568355
Total Pages : 43 pages
Book Rating : 4.56/5 ( download)

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Download or read book The Effects of Monetary Policy Shocks on Inequality written by Davide Furceri and published by International Monetary Fund. This book was released on 2017-01-18 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides new evidence of the effect of monetary policy shocks on income inequality. Using a measure of unanticipated changes in policy rates for a panel of 32 advanced and emerging market countries over the period 1990-2013, the paper finds that contractionary (expansionary) monetary actions increase (reduce) income inequality. The effect, however, varies over time, depending on the type of the shocks (tightening versus expansionary monetary policy) and the state of the business cycle, and across countries depending on the share of labor income and redistribution policies. In particular, we find that the effect is larger for positive monetary policy shocks, especially during expansions. Looking across countries, we find that the effect is larger in countries with higher labor share of income and smaller redistribution policies. Finally, while an unexpected increase in policy rates increases inequality, changes in policy rates driven by an increase in growth are associated with lower inequality.

Author : Mr. Romain A Duval
Publisher : International Monetary Fund
ISBN 13 : 1513588001
Total Pages : 56 pages
Book Rating : 4.01/5 ( download)

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Download or read book Market Power and Monetary Policy Transmission written by Mr. Romain A Duval and published by International Monetary Fund. This book was released on 2021-07-09 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: We show that firms’ market power dampens the response of their output to monetary policy shocks, using firm-level data for the United States and a large cross-country firm-level dataset for 14 advanced economies. The estimated impact of a firm’s markup on its response to a monetary policy shock is large enough to materially affect monetary policy transmission. We also find some evidence that the role of markup in monetary policy transmission, while independent from other channels, is greater for firms whose characteristics — notably size and age — are likely to be associated with greater financial constraints. We rationalize these findings through a simple partial equilibrium model in which borrowing constraints amplify disproportionately low-markup firms’ responses to changes in interest rates.

Author : Ben S. Bernanke
Publisher : MIT Press
ISBN 13 : 9780262523233
Total Pages : 398 pages
Book Rating : 4.3X/5 ( download)

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Download or read book NBER Macroeconomics Annual 2001 written by Ben S. Bernanke and published by MIT Press. This book was released on 2002 with total page 398 pages. Available in PDF, EPUB and Kindle. Book excerpt: Current issues in macroeconomics.

Author : Valentina Bonifacio
Publisher : International Monetary Fund
ISBN 13 : 1513588850
Total Pages : 47 pages
Book Rating : 4.58/5 ( download)

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Download or read book Distributional Effects of Monetary Policy written by Valentina Bonifacio and published by International Monetary Fund. This book was released on 2021-07-30 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: As central banks across the globe have responded to the COVID-19 shock by rounds of extensive monetary loosening, concerns about their inequality impact have grown. But rising inequality has multiple causes and its relationship with monetary policy is complex. This paper highlights the channels through which monetary policy easing affect income and wealth distribution, and presents some quantitative findings about their importance. Key takeaways are: (i) central banks should remain focused on macro stability while continuing to improve public communications about distributional effects of monetary policy, and (ii) supportive fiscal policies and structural reforms can improve macroeconomic and distributional outcomes.

Author : International Monetary Fund
Publisher : International Monetary Fund
ISBN 13 : 1498344062
Total Pages : 74 pages
Book Rating : 4.67/5 ( download)

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Download or read book Evolving Monetary Policy Frameworks in Low-Income and Other Developing Countries written by International Monetary Fund and published by International Monetary Fund. This book was released on 2015-10-23 with total page 74 pages. Available in PDF, EPUB and Kindle. Book excerpt: Over the past two decades, many low- and lower-middle income countries (LLMICs) have improved control over fiscal policy, liberalized and deepened financial markets, and stabilized inflation at moderate levels. Monetary policy frameworks that have helped achieve these ends are being challenged by continued financial development and increased exposure to global capital markets. Many policymakers aspire to move beyond the basics of stability to implement monetary policy frameworks that better anchor inflation and promote macroeconomic stability and growth. Many of these LLMICs are thus considering and implementing improvements to their monetary policy frameworks. The recent successes of some LLMICs and the experiences of emerging and advanced economies, both early in their policy modernization process and following the global financial crisis, are valuable in identifying desirable features of such frameworks. This paper draws on those lessons to provide guidance on key elements of effective monetary policy frameworks for LLMICs.

Author : Mr.Hamid Reza Davoodi
Publisher : International Monetary Fund
ISBN 13 : 1475553498
Total Pages : 59 pages
Book Rating : 4.99/5 ( download)

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Download or read book Monetary Transmission Mechanism in the East African Community written by Mr.Hamid Reza Davoodi and published by International Monetary Fund. This book was released on 2013-02-06 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: Do changes in monetary policy affect inflation and output in the East African Community (EAC)? We find that (i) Monetary Transmission Mechanism (MTM) tends to be generally weak when using standard statistical inferences, but somewhat strong when using non-standard inference methods; (ii) when MTM is present, the precise transmission channels and their importance differ across countries; and (iii) reserve money and the policy rate, two frequently used instruments of monetary policy, sometimes move in directions that exert offsetting expansionary and contractionary effects on inflation—posing challenges to harmonization of monetary policies across the EAC and transition to a future East African Monetary Union. The paper offers some suggestions for strengthening the MTM in the EAC.

Author : Margherita Bottero
Publisher : International Monetary Fund
ISBN 13 : 1498300855
Total Pages : 59 pages
Book Rating : 4.58/5 ( download)

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Download or read book Negative Monetary Policy Rates and Portfolio Rebalancing: Evidence from Credit Register Data written by Margherita Bottero and published by International Monetary Fund. This book was released on 2019-02-28 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study negative interest rate policy (NIRP) exploiting ECB's NIRP introduction and administrative data from Italy, severely hit by the Eurozone crisis. NIRP has expansionary effects on credit supply-- -and hence the real economy---through a portfolio rebalancing channel. NIRP affects banks with higher ex-ante net short-term interbank positions or, more broadly, more liquid balance-sheets, not with higher retail deposits. NIRP-affected banks rebalance their portfolios from liquid assets to credit—especially to riskier and smaller firms—and cut loan rates, inducing sizable real effects. By shifting the entire yield curve downwards, NIRP differs from rate cuts just above the ZLB.