Panel Data Analysis of Monetary Transmission Mechanism for European Union Countries

Yildirtan, Dina Cakmur; Sarili, Selin

doi:10.5296/jsss.v4i2.10731

jsss

2017

DOI: 10.5296/jsss.v4i2.10731

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Panel Data Analysis of Monetary Transmission Mechanism for European Union Countries

Dina Cakmur Yildirtan¹,

Selin Sarili²

Abstract: Monetary transmission mechanism is the mechanism which shows in what ways and what extent interaction between the real economy-monetary policy, impacts aggregate demand and production. While transmission channels or mechanisms traditionally classified they divided into three categories; interest rates, Exchange rates and other asset prices.In this study to test the existence of the European debt crisis by the monetary transmission mechanism, 15 members of European Union country by using annual (2002)(2003)(200… Show more

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Cited by 2 publications

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Real Sector Business Outlook and the Effectiveness of Monetary Policy on the Real Sector in Nigeria

Oladimeji

Bowale

Okodua

2021

IOP Conf. Ser.: Earth Environ. Sci.

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The effectiveness of monetary policy on the real sector has been a major concern of the monetary authority in Nigeria, over a few years ago. This has resulted in series of regulatory actions of the Central Bank of Nigeria (CBN) to ensure more funds/credit are channeled to the sector, in line with the policy objectives of the government to improve the sector. The inability of the real sector investors to meet up with their loan repayment obligations sometimes restricts the flow of this credit from the banking system to the sector, thereby jeopardizing the efforts of the monetary authority. This study, while investigating this concern, observed a similar trend pattern between real sector business outlook and real productive activities; this warranted the inclusion of this variable in the model that was estimated with SVAR. The results revealed a significant estimate of 7.95583; which is a contemporaneous response of credit to real sector to shocks from real sector business outlook. Also, an average of 0.21% variation in real output is explained by structural innovations from real sector business outlook. This means that as business or macroeconomic environment improves, the real investors invest more by accessing credit from the banking system; also, the banks are more confident of loan repayment, as the improved macroeconomic environment is expected to support business growth.

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Real Sector Business Outlook and the Effectiveness of Monetary Policy on the Real Sector in Nigeria

Oladimeji

Bowale

Okodua

2021

IOP Conf. Ser.: Earth Environ. Sci.

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The Efficiency of The Interest Channel in The Context of Monetary Policy in Developed Countries

Taş

YILMAZ

2023

İzmir İktisat Dergisi

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In recent years, the consequences of globalization and global developments in an area or around the world have harmed monetary transmission channels, creating an axis shift and diminishing the efficiency of monetary policy instruments. There is significant evidence about the influence of foreign monetary policy transfer on the excess supply of credit, according to studies on the subject. As a result, dynamically unbundling different monetary policy channels or comparing the outcomes of various policies is regarded as a crucial observation. The efficiency of the interest rate channel of the monetary transmission mechanism is explored in this study using annual data from the IMF and World Bank databases for the countries included in the MSCI emerging markets index for the years 1995 to 2021. In the study, panel unit root tests, panel cointegration tests with structural breaks, and panel causality tests developed by Kónya (2006) were applied to the variables determined to contain cross-sectional dependence. Within the framework of the panel VAR model established in line with the results obtained from these tests, the efficiency of the interest channel was investigated with the impulse-response functions and variance decomposition methods. While interest rate shocks have no statistically significant impact on loans, they do have a beneficial impact on inflation in the first two years and a negative impact in the subsequent years (up to the 6th year). In conclusion, the findings of this analysis suggest that, while shock rises in interest rates have a modest influence on the gross domestic product, they do promote, albeit slightly, the drop in the inflation rate.

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Panel Data Analysis of Monetary Transmission Mechanism for European Union Countries

Cited by 2 publications

References 11 publications

Real Sector Business Outlook and the Effectiveness of Monetary Policy on the Real Sector in Nigeria

Real Sector Business Outlook and the Effectiveness of Monetary Policy on the Real Sector in Nigeria

The Efficiency of The Interest Channel in The Context of Monetary Policy in Developed Countries

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