Lost in Transmission? The Effectiveness of Monetary Policy Transmission Channels in the GCC Countries
AbstractThis paper empirically investigates the effectiveness of monetary policy transmission in the Gulf Cooperation Council (GCC) countries using a structural vector autoregressive model. The results indicate that the interest rate and bank lending channels are relatively effective in influencing non-hydrocarbon output and consumer prices, while the exchange rate channel does not appear to play an important role as a monetary transmission mechanism because of the pegged exchange rate regimes. The empirical analysis suggests that policy measures and structural reforms - strengthening financial intermediation and facilitating the development of liquid domestic capital markets - would advance the effectiveness of monetary transmission mechanisms in the GCC countries.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 12/191.
Date of creation: 01 Jul 2012
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-08-23 (All new papers)
- NEP-ARA-2012-08-23 (MENA - Middle East & North Africa)
- NEP-CBA-2012-08-23 (Central Banking)
- NEP-MAC-2012-08-23 (Macroeconomics)
- NEP-MON-2012-08-23 (Monetary Economics)
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