Impact of Monetary Policy on Economic Growth: A Case Study of South Africa

Precious, Chipote

doi:10.5901/mjss.2014.v5n15p76

Cited by 39 publications

(41 citation statements)

References 11 publications

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“…When money supply increases by a unit, gross domestic product increases by 0.491614 units. This result is supported by the study of Precious and Palesa (2014) who showed that money supply significantly and positively influences economic growth in the long run in South Africa. Also, we found out that interest rate has a significant negative relationship with gross domestic product.…”

Section: Vector Error Correction Model (Vecm)supporting

confidence: 55%

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Does Monetary Policy Induce Economic Growth? An Empirical Evaluation of the Nigerian Economy

Imoisi¹

2019

Sriwijaya Int. J. of Dynamic Eco. And Buss.

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Monetary and Fiscal policies are instruments which the government of any nation can employ to effectively achieve the desired growth of their respective economies. This study investigates the extent to which monetary policies can promote economic growth in Nigeria from 1980-2017. Secondary data were used from the Statistical Bulletin of the apex bank in Nigeria (CBN) and National Bureau of Statistics. Unit root test, Johansen co-integration and the vector error correction model (VECM) were employed in analyzing the data collected for this study. The result showed that approximately 62% of GDP is explained by variables in the model while 38% is accounted for and explained by other variables not included in the model but are captured by the error term. In addition, monetary policies did not have a significant impact on Nigeria's economic growth in the short run, but significantly affected the country's growth in the long run.

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Section: Vector Error Correction Model (Vecm)supporting

confidence: 55%

“…The Vector Error Correction Models (VECM) is a confined VAR intended for use with non-stationary series that are recognized to be co-integrated with an Error Correction Term (ECT) built into the model (Precious and Palesa 2014). The Error Correction Term calculates every deviation from the long-run equilibrium.…”

Section: Vector Error Correction Model (Vecm)mentioning

confidence: 99%

Does Monetary Policy Induce Economic Growth? An Empirical Evaluation of the Nigerian Economy

Imoisi¹

2019

Sriwijaya Int. J. of Dynamic Eco. And Buss.

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“…Results indicate that monetary policy indicators exert a negative impact on economic growth and by extension to the financial stability and development, respectively. Likewise, Precious and Palesa (2014) examine the essential role played by the monetary policy in promoting economic growth in the South African economy over the sample period of 2000 to 2010 [36]. Using the Johansen cointegration and the error correction mechanism to evaluate the long-run and short-run relationship, findings indicate the existence of a long-run relationship among the concerned variables.…”

Section: Negative Impact Of Monetary Policymentioning

confidence: 99%

Monetary Policy and Economic Growth in Developing Countries: Evaluating the Policy Nexus in Nigeria

Idris¹

2019

IJBER

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While there are numerous studies on the relationship between monetary policy and economic growth, evaluating the policy nexus between the two phenomena remain inconclusive. Undeniably, monetary policy is believe to influence the employment level, price stability, growth of aggregate output and equilibrium in the balance of payment-for the case of developing economies. But the magnitude of its influence largely depends on how it is conducted through various channels and the independency of the apex bank to select the appropriate instruments for formulating the monetary policy. In lieu of that, this study examines the relationship between monetary policy and economic growth in Nigeria using time series data covering the period of 1980 to 2017. The study employs the Cointegration test and the Ordinary Least Square (OLS) technique with the view to estimating the model coefficients and showcase the policy nexus between the variables. Result indicates the existence of long-run relationship between monetary policy indicators and economic growth. Further empirical findings show that money supply has positive effect, while both exchange rate and interest rate have negative effect on the real GDP. As such, monetary authorities in Nigeria should adequately managed and monitored the growth level of money supply in order to realise the desired growth level. Given the socio-economic and political conditions in Nigeria, there is growing needs to formulate appropriate monetary measures which might encourage borrowing through sound and productive interest rate as well as stable exchange rate.

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“…Many empirical studies, such as Sims [16], Grilli and Roubini [6], Kim and Roubini [8], Neril and Novili [15], Li and Liang [10], Mirkov [13], Precious and Palesa [15], Barakchian [2], Bowman, et al [3], Lee and Zhu [9] have investigated the international transmission mechanism by using VAR models of developed and developing economies. Kim [7], for example, suggested that U.S. monetary policy shocks on the output of the developed countries had a positive effect.…”

Section: Introductionmentioning

confidence: 99%

The Transmission Effects of the U.S. Monetary Policy Shocks in the Korean Output and Trade: A SVAR Approach

Zhu¹

2016

IJBER

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This paper estimates the bilateral trade balance and real output growth rate in Korea to identify the transmission effects of the U.S. monetary policy shocks and then presents a statistical decomposition of the rate through a structural VAR using monthly data from January 1999 to December 2014. Results showed that the Korean trade balance is negatively affected by the U.S. monetary shocks through the exchange rate channel because of the most direct policy transmission channels is the international capital flows and exchange rate in the short-term. On the other hand, domestic real output is positively affected by the external monetary policy shocks over time. Thus the estimations of the trade balance and output growth in Korea suggest that, over the sample period, real economy in the small open economy influenced by the monetary policy shocks in the large country such as the U.S. Therefore, it is important to respond appropriately to changes in exchange rates in order to reduce unexpected negative influence from the external shocks.

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Impact of Monetary Policy on Economic Growth: A Case Study of South Africa

Abstract: This paper explores the role played by monetary policy in promoting economic growth in the South African economy over the period [2000][2001][2002][2003][2004][2005][2006][2007][2008][2009][2010]

Cited by 39 publications

References 11 publications

Does Monetary Policy Induce Economic Growth? An Empirical Evaluation of the Nigerian Economy

Does Monetary Policy Induce Economic Growth? An Empirical Evaluation of the Nigerian Economy

Monetary Policy and Economic Growth in Developing Countries: Evaluating the Policy Nexus in Nigeria

The Transmission Effects of the U.S. Monetary Policy Shocks in the Korean Output and Trade: A SVAR Approach

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