What Can We Learn About the Monetary Policy Transmission Mechanism? Evidence from a Peripheral Country After a Political Revolution and COVID-19

Abdelkader Aguir () and Nesrine Dardouri ()
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Abdelkader Aguir: ESPI - Ecole Supérieure des Professions Immobilières
Nesrine Dardouri: USO - جامعة سوسة = Université de Sousse = University of Sousse

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Abstract: Interest in empirical studies of monetary policy has grown over the past decade, and particularly since the post COVID-19 pandemic period characterized by a surge in inflation rates in every corner of the globe. Against this backdrop, central banks' traditional inflation forecast framework has been challenged, leading to renewed analysis of the monetary policy transmission mechanism. Focusing on Tunisia, an emerging small open economy subjected to external shocks, this study focuses on the role played by the monetary authority in the conduct of Tunisia's monetary policy over the period from 2000 to 2024. This period is characterized by a deceleration of growth and an increase in inflation and unemployment. This work shows also how a VAR model with long-run restrictions justified by economic theory can be usefully applied in the analysis of monetary policy; the effects of the money market rate and other shocks; the relationship between prices and the nominal effective exchange rate; and the relationship between inflation and the output gap.

Keywords: vector autoregressions; H5; I31; COVID-19; political revolution; monetary policy; monetary policy political revolution COVID-19 vector autoregressions Tunisia JEL Classification: C01 H5 I31 Z18 (search for similar items in EconPapers)
Date: 2025-09-30
New Economics Papers: this item is included in nep-ara, nep-cba and nep-mon
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Published in Economies, 2025, 13, ⟨10.3390/economies13100286⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05290329

DOI: 10.3390/economies13100286

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