DOES POLICY INTEREST RATE HAVE ASYMMETRIC ADJUSTMENT: CASE OF JORDAN

Osama Sweidan ()

Applied Econometrics and International Development, 2008, vol. 8, issue 2, 151-158

Abstract: This study seeks to test the hypothesis that policy interest rate in Jordan adjusts differently to expansionary versus contractionary monetary policies. The answer highlights on the behavior of the central bank of Jordan (CBJ), and helps to conclude if the CBJ is biased in favor of certain policy. The current study applies threshold autoregressive (TAR) and momentum TAR (MTAR) models. The results show that policy interest rate in Jordan displays symmetric adjustment which supports the idea that the CBJ is not prejudice of either easy or tight monetary policy.

Keywords: Hypothesis Testing; Monetary Policy; Central Bank; TAR Model. (search for similar items in EconPapers)
JEL-codes: C12 E58 (search for similar items in EconPapers)
Date: 2008
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