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Copyright of Journal of Economics & Administrative Sciences is the property of Republic of Iraq Ministry of Higher Education & Scientific Research (MOHESR) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper's objective is to examine the asymmetric cointegration and asymmetric effects of financial development and monetary policy on monetary transmission mechanisms in the Nigerian context using annual data spanning the period from 1986 to 2023. This study pushes the frontiers of knowledge by providing information on the nonlinear impacts of monetary policy and financial sector innovations on monetary transmission mechanisms in Nigeria to help policymakers tailor their strategies to local conditions, enhancing the effectiveness of monetary interventions in the economy. To achieve this, this paper adopted nonlinear ARDL models to understand how changes in the direction of monetary policy and developments in the financial system induce changes in the transmission of monetary policy. The findings document the existence of asymmetries in both the short and long run, revealing that the impacts of financial development and monetary policy on the different monetary policy channels are not uniform. These asymmetries indicate that the responses of various economic variables to monetary policy actions differ depending on the level of financial development. These findings underscore the complexity of the monetary transmission mechanism and the necessity for a nuanced understanding of how financial development and monetary policy interact in different contexts. Consequently, this finding is symptomatic of some characteristics of those financial markets on their way toward advanced developments. As the financial system matures, monetary policy may have a greater impact on the cost of short-term funding for banks without having any discernible effect on the rates at which businesses and households access funding. Therefore, this paper recommends focusing on the policies that will foster the financial system across the banking sector, capital market, bond market, and overall financial sector to improve the efficiency of the monetary transmission process. [ABSTRACT FROM AUTHOR]

As long as all interest rates move in tandem – including the rate of return on paper currency – economic theory suggests no important difference between interest rate changes in the positive region and interest rate changes in the negative region. Indeed, in standard models, only the real interest rate and spreads between real interest rates matter. Thus, in most respects, negative interest rate policy is conventional. It is only (a) what needs to be done with paper currency, (b) difficulties in understanding negative rates or (c) institutional features interacting with negative rates that make negative interest rate policy unconventional. [ABSTRACT FROM AUTHOR]

In recent years central bankers have devoted increased attention to the question of whether and how to intervene to address the growing environmental and climate crisis. The climate intervention debate gained momentum during a period of low inflation and loose monetary policy in core economies – a time characterised by near zero interest rates and large asset purchase programmes. Since 2021, however, the macroeconomic context has changed. Against this background, the paper analyses the contradictory and problematic nature of the direction monetary policy has taken in reaction to higher inflation. It argues that higher interest rates delay the green transformation by raising the cost of sustainable investments, and that the resulting delay also hampers prospects for achieving price stability. The paper concludes that the present macroeconomic environment demands a 'greener and cheaper' monetary policy approach designed to address the environmental and climate crisis and also to simultaneously fight inflation. [ABSTRACT FROM AUTHOR]

Islam allowed the selling transaction and prohibited the interest rate. So, can an economy function properly and efficiently without an interest rate? In a conventional economy the interest rate is used as a tool to stimulate investment, savings, money supply, exchange rate, and other economic variables. Thus, the concept of an interest rate is deeply embedded, and plays a vital role in an economy. It is not easy to remove this concept from an economy. The purpose of this paper is to demonstrate that an economy can function properly without the use of an interest rate by looking at the Palestinian economy. The Palestinian economy is a small, open, and semi-independent on the Israeli economy; it is thus unique in nature, where it is an economy that has no local currency. Palestinians use the New Israeli Shekel, US Dollar, Jordanian Dinar, and Euro. So, the Palestine Monetary Authority (PMA) place the role of monitoring the function of the banks, rather than the role of a Central Bank. This is of course due to the absence of a local currency. Therefore, the Palestinian Government has no monetary policy, i.e., monetary policy does not exist in the Palestinian economy. In addition, the concept of an interest rate to an individual Palestinian can be replaced by the concept of profit sharing. That is, a Palestinian can be driven by the concept of profit sharing rather than the concept of an interest rate. This paper concludes by using an empirical example that an economy can function without an interest rate. [ABSTRACT FROM AUTHOR]

This study investigates the bank risk-taking channel of monetary policy transmission by comprehensively analyzing multiple bank risk measurements amid monetary policy shocks in Vietnam. Using banking data for 2008-2021, a dynamic panel model is estimated to examine the risk exposure of 30 Vietnamese commercial banks. The paper employs the annual M2 money supply growth as a monetary policy variable, besides two policy interest rates established by the central bank. We find that an expansion of monetary policy benefits the quality of loan portfolios; however, reduced interest rates or an extended money supply increase insolvency risk. We also document that heightened economic growth corresponds to a reduced likelihood of credit and insolvency risks, while a surge in the inflation rate leads to an escalation in insolvency risk, manifested by a decline in the Z-score index. Overall, the findings on different risk dimensions in this paper are expected to draw a comprehensive picture of banks' risk appetite and behavior in response to monetary changes. [ABSTRACT FROM AUTHOR]

This paper empirically examines the effect of domestic monetary policy shock on external commercial borrowings (ECBs) to India for the period 2000:Q2 to 2019:Q4. The impact of domestic monetary policy shock on ECBs is assessed using two variables: interest rate differential and domestic money supply growth. The paper employs a structural VAR model and utilizes impulse response functions and forecast error variance decomposition analysis to derive empirical results. The empirical results based on impulse response functions indicate that the interest rate differential has a positively significant effect on external commercial borrowings to India, while the effect of domestic money supply growth is found to be negative. The forecast error variance decomposition analysis indicates that the interest rate differential explains about 14.6% and domestic money supply growth explains about 2% of the total variation in external commercial borrowings, implying that domestic monetary policy variables together explain about 16.6% of the total variation in ECBs to India. The results suggest that the central bank, through monetary policy interventions, can influence and manage the flow of external commercial borrowings to India. Furthermore, the study finds that the exchange rate, domestic industrial activity, domestic output growth, domestic country's creditworthiness, and domestic macroeconomic instability are other significant determinants of external commercial borrowings. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to conduct a survey of the recent literature that evaluates, in an empirical way, the distributional impacts of monetary policy. In the first two sessions, we discuss, respectively, the transmission channels of monetary policy to income distribution and the empirical strategies used to measure it. The majority of surveyed papers find that a contractionary monetary policy worsen the income distribution, and that an expansionist policy tends to improve it. Moreover, several papers found that the higher is the redistributive impact of fiscal policy, the lower is the impact of monetary policy on inequality. Another outcome with empirical support is the role of the labor share on total income: the higher is this share, the higher is the impact of monetary policy on inequality. The last point discussed is the asymmetric effects of contractionary and expansionary monetary policy. There is evidence that increases in interest rates have statistically significant effects on income distribution, whereas the effects of reductions in interest rates are not statistically different from zero. This empirical finding goes against the conventional view that the distributional effects of interest rate changes are temporary and likely to net out over the business cycle. [ABSTRACT FROM AUTHOR]

Purpose: The article aims to establish whether the degree of aversion to inflation and the responsiveness to deviations from potential output have changed over time. Design/methodology/approach: This paper assesses time variation in monetary policy rules by applying a time-varying parameter generalised methods of moments (TVP-GMM) framework. Findings: Using monthly data until December 2022 for five inflation targeting countries (the UK, Canada, Australia, New Zealand, Sweden) and five countries with alternative monetary regimes (the US, Japan, Denmark, the Euro Area, Switzerland), we find that monetary policy has become more averse to inflation and more responsive to the output gap in both sets of countries over time. In particular, there has been a clear shift in inflation targeting countries towards a more hawkish stance on inflation since the adoption of this regime and a greater response to both inflation and the output gap in most countries after the global financial crisis, which indicates a stronger reliance on monetary rules to stabilise the economy in recent years. It also appears that inflation targeting countries pay greater attention to the exchange rate pass-through channel when setting interest rates. Finally, monetary surprises do not seem to be an important determinant of the evolution over time of the Taylor rule parameters, which suggests a high degree of monetary policy transparency in the countries under examination. Originality/value: It provides new evidence on changes over time in monetary policy rules. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Scientific Development for Studies & Research (JSD) is the property of Journal of Scientific Development for Studies & Research (JSD) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The distributional outcomes of monetary policy have garnered increasing attention in recent years. While there has been significant progress on both the theoretical and methodological design of studies on advanced economies, research on China has been limited, partly because of its opaque and unique monetary policy framework. This paper investigates the distributional effects of monetary policy shocks in China from 2003 to 2021, as the central bank converges towards a standard interest-rate based regime. A novel policy shock series for China is constructed using the high-frequency external instrument identification method that addresses endogeneity concerns between macroeconomic factors and policy decisions. A structural vector autoregression system identified by short-run restrictions is then used to analyze the impulse responses of income measures and asset market returns to these shocks. Findings suggest that contractionary monetary policy shocks have a negative impact on inequality in China, by increasing the relative share of income at the top and decreasing the share at the bottom of the distribution. Adverse effects are stronger for lower income groups who derive most of their income from labor and business, and experience large and persistent negative effects from an unanticipated rate hike. Meanwhile, the impacts on top earners are neutral or modestly positive, since their income portfolios are diversified by property holdings. As such, this analysis supports the income composition channel theory in explaining the heterogeneity in household responses to monetary policy shocks. [ABSTRACT FROM AUTHOR]

As one of the largest world's economies, China’s economy plays an important role at regional and global levels. In this context, with the fast opening steps of the Chinese economy to international markets, the Chinese Central Bank (PBC or PBOC) has adjusted its mechanisms to the needs of local and international economies. Chinese monetary policy is designed to keep prices and economic growth stable and to ensure the country’s economic development. The Chinese Central Bank has a significant influence over Chinese interest rates, interbank rates, and changes in liquidity and credit. The main goal of this research paper is to describe the role of the Chinese Central Bank in delivering Chinese monetary policy and its changes over the past few years. Our research paper is dedicated to verifying how the Chinese Central Bank's press releases are useful indicators for the future trend of market interest rates after constructing a numerical index representative of expansive or restrictive net signals contained in any of the PBC Communications examined. An empirical analysis over Chinese Monetary Policy Communications (Reports) is included in this research paper, presenting how the Central Bank of China is implementing its monetary policy in order to influence the development of its economic growth through its market interest rates, liquidity and credit movement. [ABSTRACT FROM AUTHOR]

This paper offers a plain model to organise thinking about the disinflation policy. It exploits the insight that monetary and fiscal policy are intertwined. The model links inflationary expectations, monetary policy and fiscal policy, and contemplates a disinflation policy consisting of two plans, not necessarily connected: a monetary plan and a fiscal plan. The central question examined is which type of policy generates a lower policy interest rate – a monetary plan without fiscal cooperation or a monetary plan with fiscal austerity? The economic logic articulated by the model generates the following answer: the equilibrium policy rate set by the central bank can always be brought down by reducing the budget deficit. This qualitatively unambiguous prediction may be dependent on silent omissions, which are briefly discussed at the end of the paper. [ABSTRACT FROM AUTHOR]

The paper examined the interest rate operations and processes in Nigeria and examined the role of financial development in incentivizing central bank monetary policies from the monetary policy rate to the money market rates, lending rates, and deposit rates. The analysis covered the period from 1981 to 2021 with sub-samples for 1981 to 2011 and 1991 to 2021 to test the consistency of the findings. The findings confirmed that interest rate pass-through is incomplete for Nigeria, albeit to a lower degree in the short run compared to the long run. The reasons for this may be due to interest rate stickiness, problems of asymmetric information, and bank switching costs. Also, the findings confirmed that financial development weakens the impact of monetary policy on the interest rate pass-through process, while the analysis of the asymmetric mean adjustment lags confirmed that changes in the policy rate are transmitted to the deposit and lending rates within the year it was announced. The analysis confirmed that the results across each sub-sample and the robustness tests are consistent with the main analysis. Therefore, it is imperative that policymakers should account for financial development when designing monetary policy effectiveness since it can hinder or strengthen the interest rate monetary policy channel. [ABSTRACT FROM AUTHOR]

The monetary policy of the central bank plays an important role, which is even further increased in times of crises. This paper examines the efficiency of the monetary transmission mechanism through the interest rate channel in the Republic of North Macedonia. The research of the efficiency of the monetary transmission mechanism is carried out with the statistical methods of simple linear correlation and regression. Moreover, this paper examines the impact of the changes in the interest rate of the central bank treasury bills, on the interest rates of the interbank deposit market, and, then the transmission to the interest rates of the loans issued by the commercial banks. The results indicate a slight difficulty in the functioning of the transmission mechanism through the interest rate channel in the country, since the commercial banks do not take immediate actions upon the monetary signals sent by the National Bank through the main instrument of the open market operations. The causes for this situation can be found in certain specific characteristics inherent to the Macedonian banking sector. [ABSTRACT FROM AUTHOR]