COVID-19 uncertainty, financial markets and monetary policy effects in case of two emerging Asian countries

Harendra Behera, Iman Gunadi and Badri Rath

Economic Analysis and Policy, 2023, vol. 78, issue C, 173-189

Abstract: This paper examines the effectiveness of the monetary policies undertaken by the central bank on economic growth during COVID-19 uncertainty in case of India and Indonesia. We use an innovative framework of Growth-at-Risk as oppose to standard macroeconomic models, which can predict the growth in a much robust way particularly when an economy is facing shocks like COVID-19. The empirical results based on Growth-at-Risk model clearly reveal that effect of COVID-19 pandemic on economic growth is much adverse in comparison to actual declines. Further, this study shows the effectiveness of monetary and financial policies undertaken by the central banks of both India and Indonesia, which have actually subsided the adverse impact of COVID-19.

Keywords: COVID-19; Financial markets; Monetary policy; Growth-at-risk (GaR); Quantile regression; India; Indonesia (search for similar items in EconPapers)
JEL-codes: E52 E65 G20 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:78:y:2023:i:c:p:173-189

DOI: 10.1016/j.eap.2023.03.001

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