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Monetary Policy in Transition; The Case of Mongolia

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  • Torsten M Sloek

Abstract

This paper analyzes monetary policy in transition. It examines the dynamics of monetary policy in Mongolia using granger-causality tests for monetary variables and inflation. The paper also analyzes money demand using data from 22 Mongolian regions during 1993-1998. The analyses confirm the key role of monetary policy in stabilization and reveal that even in a transition economy as rudimentary as Mongolia, a stable money demand and a predictable relationship between inflation and monetary variables do exist. Hence market-based monetary policy is effective. In addition, the analysis points to a difference between transition and industrial economies in the elasticity of money demand with respect to activity, reflecting the larger role for transactions demand for money.

Suggested Citation

  • Torsten M Sloek, 2000. "Monetary Policy in Transition; The Case of Mongolia," IMF Working Papers 00/21, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:00/21
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    Cited by:

    1. Kevin C Cheng, 2003. "Growth and Recovery in Mongolia During Transition," IMF Working Papers 03/217, International Monetary Fund.

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