Monetary Policy in Turbulent Times: Impact of Unconventional Monetary Policies

2010 ◽  
Author(s):  
Anil Perera
Keyword(s):  
Monetary Policy ◽  
Monetary Policies ◽  
Turbulent Times

scholarly journals The Influence of Trading Volume, Market Trend, and Monetary Policy on Characteristics of the Chinese Stock Exchange: An Econophysics Perspective

Open Physics ◽  
2019 ◽  
Vol 17 (1) ◽  
pp. 985-998
Author(s):  
Meng Ran ◽  
Zhenpeng Tang ◽  
Weihong Chen
Keyword(s):  
Monetary Policy ◽  
Trading Volume ◽  
Stock Exchange ◽  
Composite Index ◽  
Policy Formulation ◽  
Time Intervals ◽  
Monetary Policies ◽  
Policy Cycles ◽  
Trading Volumes ◽  
Healthy Growth

Abstract The paper adopts the financial physics approach to investigate influence of trading volume, market trend, as well as monetary policy on characteristics of the Chinese Stock Exchange. Utilizing 1-minute high-frequency data at various time intervals, the study examines the probability distribution density, autocorrelation and multi-fractal of the Shanghai Composite Index. Our study finds that the scale of trading volume, stock market trends, and monetary policy cycles all exert significant influences on micro characteristics of Shanghai Composite Index. More specifically, under the conditions of large trading volumes, loose monetary policies, and downward stock trends, the market possesses better fitting on Levy’s distribution, the volatility self-correlation is stronger, and multifractal trait is more salient. We hope our study could provide better guidance for investment decisions, and form the basis for policy formulation aiming for a healthy growth of the financial market.

scholarly journals Impacts of Monetary Policy on Commercial Banks’ Profits: The Case of Vietnam

2017 ◽  
Vol 13 (8) ◽  
pp. 32
Author(s):  
Thanh Nhan Nguyen ◽  
Ngoc Huong Vu ◽  
Ha Thu Le
Keyword(s):  
Monetary Policy ◽  
Commercial Banks ◽  
Positive Impact ◽  
Monetary Policies ◽  
Significance Level ◽  
Doing Business ◽  
Panel Data Regression ◽  
Banking Market ◽  
Data Regression ◽  
The Impact

This paper mainly concentrates on examining the impact of monetary policy on commercial banks’ profit in Vietnam by using panel data regression. In our study, the data is collected from 20 commercial banks which were doing business in Vietnam’s banking market, ranging from 2007 to 2014 in annually frequency. Monetary base (MB), discount rate (DIS) and required reserve ratio (RRR) are used as proxies for monetary policy. Profit before tax (PROFIT) is used to represent commercial banks’ performance. The results show that there is a positive relationship between banks’ profits and monetary policies. Among those chosen variables representing SBV’s monetary policy, only MB has a significant positive impact on bank’s profit at the significance level of 10%. On this premise, the study recommends that MB should be one of the variables in the center of being concerned in the SBV’s policies regarding the banking performance and stability.

scholarly journals Asymmetric effects of monetary policy in Brazil

2009 ◽  
Vol 39 (2) ◽  
pp. 277-300 ◽  
Author(s):  
Edilean Kleber da Silva Bejarano Aragón ◽  
Marcelo Savino Portugal
Keyword(s):  
Monetary Policy ◽  
Monetary Shocks ◽  
Monetary Policies ◽  
The Real ◽  
Asymmetric Effects ◽  
Real Effects ◽  
Markov Switching Models ◽  
Switching Models ◽  
The Business Cycle ◽  
Negative Shock

In this paper, we check whether the effects of monetary policy actions on output in Brazil are asymmetric. Therefore, we estimate Markov-switching models that allow positive and negative shocks to affect the growth rate of output in an asymmetric fashion in expansion and recession states. In general, results show that: i) the real effects of negative monetary shocks are larger than those of positive shocks in an expansion; ii) in a recession, the real effects of positive and negative shocks are the same; iii) there is no evidence of asymmetry between the effects of countercyclical monetary policies; and iv) it is not possible to assert that the effects of a positive (or negative) shock are dependent upon the phase of the business cycle.

scholarly journals Coordination Effects and Optimal Policy Choices of Macroprudential Policy and Monetary Policy

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-11
Author(s):  
Haifeng Pan ◽  
Dingsheng Zhang
Keyword(s):  
Monetary Policy ◽  
Social Welfare ◽  
Optimal Policy ◽  
Real Estate Market ◽  
Macroprudential Policy ◽  
Monetary Policies ◽  
Policy Rules ◽  
Monetary Policy Rules ◽  
Macroprudential Policies ◽  
Dynamic Stochastic

Considering three monetary policy rules, together with two endogenous macroprudential policies that are credit constraints (loan to value, LTV) for households and counter-cyclical capital (capital requirement ratio, CRR) for bankers, this paper establishes a dynamic stochastic general equilibrium (DSGE) model. Based on the welfare analysis of different combinations of macroprudential rules and monetary policy rules, this paper identifies the optimal policy combinations and analyzes the coordination effects between macroprudential policies and monetary policies. The results show that no matter what kind of monetary policy rules is implemented, the introduction of macroprudential rules has improved the level of total social welfare. In the optimal “two pillars” framework of monetary policies and macroprudential rules, the main objective of monetary policy is to stabilize price inflation, and the macroprudential policy to be implemented is the CRR macroprudential policy. This combination can effectively promote the stability of the real estate market, financial market, and macroeconomy, while maximizing the improvement of total social welfare.

scholarly journals Spillovers of US Conventional and Unconventional Monetary Policies to Russian Financial Markets

2018 ◽  
Vol 10 (2) ◽  
pp. 14 ◽  
Author(s):  
Shigeki Ono
Keyword(s):  
Monetary Policy ◽  
Financial Markets ◽  
Interest Rates ◽  
Stock Prices ◽  
Monetary Policy Shocks ◽  
Federal Funds Rate ◽  
Monetary Policies ◽  
Endogenous Variables ◽  
Policy Shocks ◽  
Monetary Policy Shock

This paper investigates the spillovers of US conventional and unconventional monetary policies to Russian financial markets using VAR-X models. Impulse responses to an exogenous Federal Funds rate shock are assessed for all the endogenous variables. The empirical results show that both conventional and unconventional tightening monetary policy shocks decrease stock prices whereas an easing monetary policy shock does not increase stock prices. Moreover, the results suggest that an unconventional tightening monetary policy shock increases Russian interest rates and decreases oil prices, implying reduced liquidity in international financial markets.

scholarly journals Fiscal-Monetary-Financial Stability Interactions in a Data-Rich Environment

2018 ◽  
Vol 18 (3) ◽  
pp. 195-224 ◽  
Author(s):  
Martin Hodula ◽  
Lukáš Pfeifer
Keyword(s):  
Monetary Policy ◽  
Systemic Risk ◽  
Financial Stability ◽  
House Prices ◽  
Empirical Support ◽  
Financial Sector ◽  
Economic Policies ◽  
Real Economy ◽  
Monetary Policies ◽  
Fiscal And Monetary Policy

Abstract In this paper, we shed some light on the mutual interplay of economic policy and the financial stability objective. We contribute to the intense discussion regarding the influence of fiscal and monetary policy measures on the real economy and the financial sector. We apply a factor-augmented vector autoregression model to Czech macroeconomic data and model the policy interactions in a data-rich environment. Our findings can be summarized in three main points: First, loose economic policies (especially monetary policy) may translate into a more stable financial sector, albeit only in the short term. In the medium term, an expansion-focused mix of monetary and fiscal policy may contribute to systemic risk accumulation, by substantially increasing credit dynamics and house prices. Second, we find that fiscal and monetary policy impact the financial sector in differential magnitudes and time horizons. And third, we confirm that systemic risk materialization might cause significant output losses and deterioration of public finances, trigger deflationary pressures, and increase the debt service ratio. Overall, our findings provide some empirical support for countercyclical fiscal and monetary policies.

scholarly journals An econometric analysis of the effectiveness of fiscal and monetary policies in India

2021 ◽  
Author(s):  
Anand Nadar
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Fiscal Policy ◽  
Money Supply ◽  
Series Data ◽  
Monetary Policies ◽  
Indian Economy ◽  
Long Run ◽  
Short Run ◽  
Bound Test

This study investigatesthe effectiveness of fiscal policy and monetary policy in India. We collected thetime series data for India ranging from 1960 to 2019 from World Development Indicator (WDI). Weapplied the bound test co-integration approach to check the long-run relationship between fiscalpolicy, monetary policy, and economic growth in the context of Indian economy. The short-run andlong-run effects of fiscal policy and monetary policy have been estimated using ARDL models. Theresults showed that there is a long-run relationship between fiscal and monetary policies witheconomic growth. The estimated short-run coefficients indicated that a few immediate short runimpacts of fiscal and monetary policies are insignificant. However, the short-run impacts becomesignificant as time passes. The long-run results suggested that the long-run impact of both fiscal andmonetary policies on economic growth are positive and significant. More specifically, the GDP levelincreases if the money supply and government expenditure increase (Expansionary fiscal andmonetary policies). On the other hand, the GDP level decreasesif the money supply and governmentexpenditure decrease (contractionary fiscal and monetary policies). Therefore, this studyrecommends to use expansionary policies to spur the Indian economy.

The Impact of US Monetary Policy and Other External Shocks on the Hong Kong Economy

2019 ◽  
pp. 239-260
Author(s):  
Hongyi Chen ◽  
Andrew Tsang
Keyword(s):  
Monetary Policy ◽  
Hong Kong ◽  
Financial Stability ◽  
Mainland China ◽  
External Shocks ◽  
Monetary Policies ◽  
Macroprudential Policies ◽  
Loan Quality ◽  
The Impact ◽  
Us Monetary Policy

This chapter uses the factor-augmented vector autoregression framework to study the impact on the Hong Kong economy of the diverging monetary policies by the Fed, the European Central Bank (ECB), and the Bank of Japan (BoJ), as well as the slowdown of the Mainland economy. The empirical results show that shocks in US monetary policy rate mainly affect interest rate-sensitive sectors in Hong Kong and that monetary easing from the ECB and the BoJ somewhat offsets the impact of tightening of the Fed. Real variables such as real GDP growth and the unemployment rate are more sensitive to the economic slowdown in Mainland China. However, Hong Kong’s financial stability, particularly with regard to loan quality, banks’ capital and liquidity, is well maintained by macroprudential policies, suggesting that Hong Kong’s financial system is resilient to external shocks.

scholarly journals Comparison of effects of expansionary monetary policy in the Czech Republic and Slovakia

2020 ◽  
Vol 74 ◽  
pp. 04006
Author(s):  
Boris Fisera ◽  
Jana Kotlebova
Keyword(s):  
Monetary Policy ◽  
Czech Republic ◽  
Banking Sector ◽  
Open Economies ◽  
Balance Sheet ◽  
Bank Lending ◽  
Central Banks ◽  
Monetary Policies ◽  
The Czech Republic ◽  
Economic Developments

The ongoing process of globalization has affected the way the monetary policy is conducted – and this is especially the case of small open economies, where the economic developments are heavily affected by the developments abroad. Therefore, the aim of this paper is to investigate the effects of unconventional monetary policy in two very open economies – Slovakia and the Czech Republic in the post-crisis era – the two rather similar very open economies. We assess the effects of their monetary policies by estimating their impact on the banking sector in both countries. We employ two cointegrating estimators – DOLS and FMOLS, so that we can assess the dynamics of the relationship between the developments of main balance sheet items of the respective central banks and the aggregate bank lending to various sectors of the economy. We do find evidence that unconventional policies of both central banks did lift bank lending – with the effect being stronger in Slovakia and for the QE policies. In both countries, the effect was more pronounced for the bank lending to household sector – specifically on housing related loans. Finally, we do not find evidence that the increasing openness of these two already very open economies affected the transmission of monetary policies into the banking sector.

Five years of the ECB - a mixed experience

2003 ◽  
Vol 9 (4) ◽  
pp. 633-645
Author(s):  
Gustav Horn
Keyword(s):  
Monetary Policy ◽  
Price Stability ◽  
Monetary Policies ◽  
Wage Formation

This article examines the performance of the ECB's monetary policy. It concludes that the ECB has performed well as regards its primary goal of keeping inflation under control. However, as long as price stability is not threatened the ECB can and should contribute to growth. Here, however, after a good start, the ECB's performance has been disappointing. This article argues that greater coordination between wage and monetary policies is required: if the ECB were to take account of stability-oriented national wage formation policies, then it could pursue a monetary policy that promoted growth without putting in jeopardy price stability.

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