Lost in Transmission? The Effectiveness of Monetary Policy Transmission Channels in the GCC Countries

Working Paper No. 12/191

This 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.
Publication date: July 2012
ISBN: 9781475505399
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Topics covered in this book

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Economics- Macroeconomics , Economics / General , International - Economics , Monetary Policy Transmission , Credit Channel , Structural Var , Interest Rates On Loans , Currency Pegs , Bank Credit , Economic Growth , Economic Conditions , Money And Interest Rates

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