The balance sheet channel of monetary policy: the panel evidence of Egypt

Shokr, Mohamed Aseel; Karim, Zulkefly Abdul; Zaidi, Mohd Azlan Shah

doi:10.1080/17520843.2016.1252409

Cited by 3 publications

(1 citation statement)

References 25 publications

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“…The researches in Egypt always concentrated on the impact of monetary policy on investment and output (Shokr, & et al, 2017, and Lemaire, T., 2018), and don't concern with consumption.…”

Section: Introductionmentioning

confidence: 99%

The Impact of Interest Rate Movement on Consumption and Output

Abdelgany¹

2020

مجلة السیاسة والاقتصاد

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Interest rate is considered one of the most important tools of monetary policy in Egypt, and it is the most used to maintain price stability and tackle inflation, here we study its effect on consumption and income in an econometric technique. This research is concerned with the study of the impact of interest rate shocks as an indicator of monetary policy on household consumption and Income in Egypt during the period from 1980 to 2018.The research applies the quantitative analysis approach and uses the econometric model to deduce results and uses a Small Structural Vector Autoregressive Model (SVAR). The research concludes that one standard deviation shock in interest rate shrinks consumption, but this very small and fast decrease is almost insignificant, while income initially increases in response to this positive shock. On the other hand, a negative shock in consumption causes a reduction in interest rate. the research also indicated a mutual relationship between consumption and income.

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“…The researches in Egypt always concentrated on the impact of monetary policy on investment and output (Shokr, & et al, 2017, and Lemaire, T., 2018), and don't concern with consumption.…”

Section: Introductionmentioning

confidence: 99%

The Impact of Interest Rate Movement on Consumption and Output

Abdelgany¹

2020

مجلة السیاسة والاقتصاد

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Real interest rate, income and bank loans: panel evidence from Egypt

Shokr

2019

JFEP

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Purpose This paper aims to examine the effectiveness of monetary policy on bank loans in Egypt using generalized method of moments (GMM) model. Also, it investigates the impact of bank level variables, namely, total assets, liquidity, capital and income on bank loans. It develops the equation of loans, which is introduced by Ehrmann et al. (2002) using bank level variables such as income and the interaction between income and interest rate. Design/methodology/approach This paper examines the impact of monetary policy shocks on bank loans in Egypt by applying the GMM technique and panel data from 1996 to 2014. Findings The results reveal that real interest rate has a significant impact on bank loans, which indicates that the bank lending channel is effective in Egypt. Furthermore, the bank level variables, namely, banks’ size, liquidity and income have significant effects on bank loans in Egypt, which sustains the heterogeneous effect of monetary policy on bank loans. Therefore, the Central Bank of Egypt (CBE) can adjust interest rate to influence the bank loans and total demand. Research limitations/implications It does not examine the effect of monetary policy on small and large banks in Egypt. Practical implications The policy implications from this paper indicate that the monetary authority in Egypt should adjust interest rate to stabilize the bank loan supply. By stabilizing the bank loans, the monetary authority is able to stabilize investment, consumption and total demand. Social implications The relevance of bank lending channel indicates that the role of commercial banks is very important in transmitting monetary policy shocks to the real sector. Originality/value It is important for the CBE, banks and people because it shows the effectiveness of bank lending channel and the effect of global financial crisis on the Egyptian economy.

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Modeling the Balance Sheet Channel of Monetary Transmission in Russia

Shchepeleva¹

2020

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Согласно теории денежно-кредитной трансмиссии изменение краткосрочной процентной ставки воздействует на объем инвестиций не только напрямую, но и опосредованно, через изменение показателей баланса кредиторов (канал банковского кредитования) и компаний-заемщиков (балансовый канал денежно-кредитной трансмиссии). Изучение механизма работы различных каналов трансмиссии представляет важную информацию для регулятора, позволяющую ему точнее оценивать последствия от проводимой политики. Цель статьи состоит в выявлении особенностей функционирования балансового канала денежнокредитной трансмиссии для России в период с 2010 по 2017 г. Сопоставление результатов модели для микро-(панельной векторной авторегрессии) и макроданных (байесовской векторной авторегрессии) указывает на наличие признаков балансового канала в российской экономике, однако полного соответствия классической трансмиссионной цепочке найти не удается. На основе проведенного анализа выявлены статистически значимые взаимосвязи между процентной ставкой и объемом инвестиций. Взаимосвязи между прочими звеньями балансового канала остаются противоречивыми. Дальнейшие направления исследования состоят в уточнении количественных характеристик выявленных взаимосвязей и сравнении «мощи» балансового канала с другими каналами денежно-кредитной трансмиссии.

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The balance sheet channel of monetary policy: the panel evidence of Egypt

Cited by 3 publications

References 25 publications

The Impact of Interest Rate Movement on Consumption and Output

The Impact of Interest Rate Movement on Consumption and Output

Real interest rate, income and bank loans: panel evidence from Egypt

Modeling the Balance Sheet Channel of Monetary Transmission in Russia

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