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The monetary transmission mechanism in Pakistan: a sectoral analysis

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  • Alam, Tasneem
  • Waheed, Muhammad

Abstract

The present paper takes a first step in investigating the monetary transmission mechanism in Pakistan at a sectoral level. Using quarterly data spanning from 1973:1 to 2003:4, we examine whether monetary policy shocks have different sectoral effects. Taking note of structural transformation of the economy and the monetary and financial reforms during 1990s, we also assess whether the reform process has notable impact on the monetary transmission mechanism. We find evidence supporting sector-specific variation in the real effects of monetary policy. Our results also suggest significant changes in the transmission of monetary shock to real sector of the economy during post-reform period.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 2719.

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Date of creation: Sep 2006
Date of revision: 13 Apr 2007
Handle: RePEc:pra:mprapa:2719

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Keywords: Monetary transmission mechanism; VAR; Pakistan; Sectoral analysis;

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Cited by:
  1. Mishra, Prachi & Montiel, Peter, 2013. "How effective is monetary transmission in low-income countries? A survey of the empirical evidence," Economic Systems, Elsevier, vol. 37(2), pages 187-216.
  2. Faiz ur, rehman & Wasim, shahid malik, 2010. "A structural VAR (SVAR) approach to cost channel of monetary policy," MPRA Paper 32349, University Library of Munich, Germany, revised 09 Feb 2011.

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