Measuring monetary policy by money supply and interest rate: evidence from emerging economies

IF 0.4 Q4 ECONOMICS
Trung Bui, Kiss Dávid Gábor
{"title":"Measuring monetary policy by money supply and interest rate: evidence from emerging economies","authors":"Trung Bui, Kiss Dávid Gábor","doi":"10.2478/revecp-2021-0015","DOIUrl":null,"url":null,"abstract":"Abstract Although measuring monetary policy is a contentious issue in the literature, much less evidence on this issue is available for emerging economies. This paper aims to investigate the role of interest rate and money supply in measuring monetary policy in twelve emerging economies that target inflation through the analysis of Granger causality, impulse response function, and forecast error variance decomposition. The empirical results show that both money supply and interest rate are useful predictors for changes in inflation. Moreover, both show a comparable power to explain the variation of inflation. However, a rise in interest rate increases rather than decreases inflation, whereas money supply has a positive and expected effect on inflation. These findings suggest that interest rate may not fully capture the overall stance of monetary policy or interest rate has a limited effect on inflation.","PeriodicalId":43002,"journal":{"name":"Review of Economic Perspectives","volume":null,"pages":null},"PeriodicalIF":0.4000,"publicationDate":"2021-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Review of Economic Perspectives","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2478/revecp-2021-0015","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 1

Abstract

Abstract Although measuring monetary policy is a contentious issue in the literature, much less evidence on this issue is available for emerging economies. This paper aims to investigate the role of interest rate and money supply in measuring monetary policy in twelve emerging economies that target inflation through the analysis of Granger causality, impulse response function, and forecast error variance decomposition. The empirical results show that both money supply and interest rate are useful predictors for changes in inflation. Moreover, both show a comparable power to explain the variation of inflation. However, a rise in interest rate increases rather than decreases inflation, whereas money supply has a positive and expected effect on inflation. These findings suggest that interest rate may not fully capture the overall stance of monetary policy or interest rate has a limited effect on inflation.
通过货币供应量和利率衡量货币政策:来自新兴经济体的证据
虽然衡量货币政策在文献中是一个有争议的问题,但关于新兴经济体的这一问题的证据要少得多。本文旨在通过格兰杰因果关系分析、脉冲响应函数分析和预测误差方差分解,探讨12个以通胀为目标的新兴经济体的利率和货币供应量在衡量货币政策中的作用。实证结果表明,货币供应量和利率都是通货膨胀变化的有效预测指标。此外,两者在解释通货膨胀的变化方面都表现出相当的能力。然而,利率的上升增加而不是减少通货膨胀,而货币供应量对通货膨胀有积极的和预期的影响。这些发现表明,利率可能不能完全反映货币政策的总体立场,或者利率对通货膨胀的影响有限。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 求助全文
来源期刊
CiteScore
1.40
自引率
0.00%
发文量
10
审稿时长
38 weeks
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
确定
请完成安全验证×
copy
已复制链接
快去分享给好友吧!
我知道了
右上角分享
点击右上角分享
0
联系我们:info@booksci.cn Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。 Copyright © 2023 布克学术 All rights reserved.
京ICP备2023020795号-1
ghs 京公网安备 11010802042870号
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术官方微信