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: Balance Sheet Channel of Monetary Transmission in Pakistan: An Empirical Investigation

Author

Listed:
  • Safia Shabbir

    (State Bank of Pakistan)

Abstract

Using data of non-financial listed firms over a period of 1999-2010, this paper investigates the effectiveness of balance sheet channel of monetary transmission mechanism in Pakistan. By classifying firms as SME and large, it finds a strong evidence for the existence of net worth channel. A tight monetary policy worsens the net worth of both the SMEs and large firms, with SMEs getting more hit on their cash flows, short-term borrowing, and revenues.

Suggested Citation

  • Safia Shabbir, 2012. ": Balance Sheet Channel of Monetary Transmission in Pakistan: An Empirical Investigation," SBP Research Bulletin, State Bank of Pakistan, Research Department, vol. 8, pages 1-12.
    • Handle: RePEc:sbp:journl:58
    as

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    File URL: http://www.sbp.org.pk/research/bulletin/2012/Vol-8-1/article1safia.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Monetary policy; monetary transmission; balance sheet channel;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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