MONETARY POLICY RULES IN MALAYSIA, SINGAPORE AND THAILAND

Chai-Thing Tan () and Azali Mohamed ()
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Chai-Thing Tan: Universiti Tunku Abdul Rahman
Azali Mohamed: Universiti Putra Malaysia
Authors registered in the RePEc Author Service: M. Azali and M Azali

Bulletin of Monetary Economics and Banking, 2020, vol. 23, issue 4, 565-596

Abstract: This paper investigates whether monetary policies in Malaysia, Thailand and Singapore are best represented by either the Taylor rule or the augmented Taylor rule. It finds that the augmented Taylor rule, which incorporates the exchange rate and government spending, best represents monetary policies in these countries. The results show that past inflation and the output gap play a role in the monetary policy reaction function in Malaysia and Thailand. The results further show a strong preference towards interest rate smoothing, government spending, and the exchange rate by the central banks.

Keywords: Monetary policy rules; Fiscal policy rules; Monetary and fiscal policy interactions (search for similar items in EconPapers)
JEL-codes: E52 E58 E62 E63 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:23:y:2020:i:4f:p:565-596

DOI: 10.21098/bemp.v23i4.1112

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