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The Transmission of Monetary Policy in Israel

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  • Fiorella De Fiore

Abstract

This paper investigates the transmission of Israeli monetary policy since 1990. Two issues are addressed: the extent to which monetary policy exerts real effects, and the relative importance of different transmission channels. The impact of monetary restraints on aggregate industrial production is found to be small, although industrial sectors open to trade appear to suffer to a larger extent than closed sectors. Three transmission channels are analyzed by comparing the empirical evidence to that predicted by theory. While the credit and exchange rate channels may be important mechanisms of transmission, the interest rate channel finds weak support in the data.

Suggested Citation

  • Fiorella De Fiore, 1998. "The Transmission of Monetary Policy in Israel," IMF Working Papers 98/114, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:98/114
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    References listed on IDEAS

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    Cited by:

    1. Daniel C. Hickman & William W. Olney, 2011. "Globalization and Investment in Human Capital," ILR Review, Cornell University, ILR School, vol. 64(4), pages 654-672, July.
    2. Khundrakpam, Jeevan Kumar & Jain, Rajeev, 2012. "Monetary Policy Transmission in India: A Peep Inside the Black Box," MPRA Paper 50903, University Library of Munich, Germany.
    3. Mishra, Prachi & Montiel, Peter J & Spilimbergo, Antonio, 2010. "Monetary transmission in low income countries," CEPR Discussion Papers 7951, C.E.P.R. Discussion Papers.
    4. Javier Gómez, 2004. "Inflation Targeting and Sudden Stops," BORRADORES DE ECONOMIA 002854, BANCO DE LA REPÚBLICA.
    5. Javier Gómez Pineda, 2004. "Inflation Targeting, Sudden Stops and the Cost of Fear of Floating," Borradores de Economia 276, Banco de la Republica de Colombia.

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