Monetary policy and financial stability: empirical evidence from South Mediterranean countries

Saoussen Ouhibi and Sami Hammami
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Saoussen Ouhibi: University of sfax , Tunisia
Sami Hammami: University of sfax, Tunisia

Bulletin of Business and Economics (BBE), 2015, vol. 4, issue 4, 198-213

Abstract: This article examines the relationship between monetary policy and financial stability, in the experience of six south Mediterranean countries (Tunisia, Morocco, Egypt, Lebanon, Jordan and Turkey) over the period 2006M1-2013M12. This research analyze the role of monetary policy to contribute to financial stability using a structural vector Auto-regressive model .our empirical results show that the effectiveness of short –term interest rates in affecting selected asset prices depends on the strategy of monetary policy . For countries that adopt a flexible exchange rate regime (Tunisia, Marocco, Egypt and Turkey), the interest rate is conducive to financial stability. But, countries that adopt a fixed exchange rate regime (Jordan and Lebanon), the interest rate is not an effective tool for promoting financial stability.

Keywords: monetary policy; financial stability; Structural Vector Autoregressive model (search for similar items in EconPapers)
JEL-codes: E40 E44 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:rfh:bbejor:v:4:y:2015:i:4:p:198-213

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