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

Serhan Cevik and Katerina Teksoz

No 2012/191, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; GCC country; interest rate; contractionary monetary policy; Monetary policy transmission; inflation; credit channel; structural VAR; monetary policy shock; exchange rate regime; GCC aggregate; GCC economy; Exchange rates; Exchange rate arrangements; Bank credit; Structural vector autoregression; Monetary transmission mechanism; Global (search for similar items in EconPapers)
Pages: 35
Date: 2012-07-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=26117 (application/pdf)

Related works:
Journal Article: Lost in Transmission? The Effectiveness of Monetary Policy Transmission Channels in the GCC Countries (2013)
Journal Article: LOST IN TRANSMISSION? THE EFFECTIVENESS OF MONETARY POLICY TRANSMISSION CHANNELS IN THE GCC COUNTRIES (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2012/191

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().