Monetary Transmission in Pakistan: The Balance Sheet Channel
AbstractUsing data of non-financial listed firms over a period of 1999-2010, this paper investigates the effectiveness of balance sheet channel in monetary transmission mechanism in Pakistan. By classifying firms as SME and large, this paper finds a strong evidence for the existence of net worth channel in Pakistan. A tight monetary policy worsens the net worth of both the SME and large firms, with SME getting more hit thereby further affecting their cash flows, short-term borrowing, and revenues.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 37862.
Date of creation: 02 Apr 2012
Date of revision:
Monetary Policy; Monetary Transmission; Firm; Models with Panel Data;
Find related papers by 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
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-17 (All new papers)
- NEP-CWA-2012-04-17 (Central & Western Asia)
- NEP-MAC-2012-04-17 (Macroeconomics)
- NEP-MON-2012-04-17 (Monetary Economics)
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