Determinants of Interest Rate Pass-through for Emerging Market Economies: The Role of Financial Market Structure

Nilufer Ozdemir () and Cuneyt Altinoz

International Advances in Economic Research, 2012, vol. 18, issue 4, 397-407

Abstract: It is essential for central banks to assess whether or not the pass-through from monetary policy rates to credit and deposit interest rates is complete in order to ensure price stability. In this article, we analyze interest rate pass-through process for emerging market economies. Since emerging market countries lack large panel data sets that are typically available for developed countries, it is hard to analyze the determinants of pass-through coefficients for emerging market countries. To overcome the data issue, we developed a country selection procedure that minimizes heterogeneity among the countries included in the analysis. Our findings indicate that banking sectors’ competition plays a more important role for emerging market countries than their developed counterparts. Copyright International Atlantic Economic Society 2012

Keywords: Interest rate pass-through; Transmission mechanism; Monetary policy; E40; E50; G15 (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1007/s11294-012-9377-9

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