UID:
edoccha_9958118823602883
Format:
1 online resource (60 p.)
ISBN:
1-4755-7098-8
,
1-4755-5349-8
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1-299-26519-7
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1-4755-9085-7
Series Statement:
IMF Working Papers ; Working Paper No. 13/39
Content:
Do changes in monetary policy affect inflation and output in the East African Community (EAC)? We find that (i) Monetary Transmission Mechanism (MTM) tends to be generally weak when using standard statistical inferences, but somewhat strong when using non-standard inference methods; (ii) when MTM is present, the precise transmission channels and their importance differ across countries; and (iii) reserve money and the policy rate, two frequently used instruments of monetary policy, sometimes move in directions that exert offsetting expansionary and contractionary effects on inflation—posing challenges to harmonization of monetary policies across the EAC and transition to a future East African Monetary Union. The paper offers some suggestions for strengthening the MTM in the EAC.
Note:
Description based upon print version of record.
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Cover; Contents; I. Introduction; II. Conduct of Monetary Policy in the EAC; A. Instruments, Targets, and Goals; B. Monetary Policy Framework; Figures; 1. Monetary Policy: Instruments, Targets and Goals; 2. Inside the Black Box of the Monetary Transmission Mechanism; C. Stability of Money Multiplier and Velocity; 3. Velocity and Money Multiplier in the EAC; Tables; 1. Decomposition of the Money Multiplier and Velocity in the EAC; III. Channels of Monetary Transmission Mechanism; A. Money Channel; B. Interest Rate Channel; C. Exchange Rate Channel; D. Credit Channel; E. Asset Price Channel
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F. Expectation ChannelIV. Review of the Empirical Literature on MTM in EAC; A. Kenya; B. Tanzania; C. Uganda; D. Rwanda and Burundi; V. Empirical Methodology; A. Recursive Structural VAR; B. Bayesian VAR; C. Factor-Augmented VAR; VI. Data; VII. Empirical Results; A. Burundi; 4. SVAR Impulse Responses for Burundi; B. Kenya; 5. Testing the Interest Rate Channel in Burundi; 6. SVAR Impulse Response for Kenya; 7. Testing the Credit Channel in Kenya; 8. Testing the Exchange Rate Channel in Kenya; C. Rwanda; 9. SVAR Impulse Response for Rwanda; 10. Testing the Credit Channel in Rwanda; D. Tanzania
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E. Uganda11. SVAR Impulse Responses for Tanzania; 12. SVAR Impulse Responses for Uganda; F. Results from Variance Decomposition; VIII. Discussion and Conclusions; 2. Variance Decomposition; A. Interpreting and Summing Up Our Results; B. Confronting the Challenges; References; Appendixes; I. Literature Review on Monetary Transmission Mechanism in the EAC; II. Full Set of SVAR Impulse Responses; Appendix II: Figures; 1. SVAR Responses for Burundi; 2. SVAR Responses for Kenya; 3. SVAR Responses for Rwanda; 4. SVAR Responses for Tanzania; 5. SVAR Responses for Uganda; III. FAVAR and BVAR Results
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Appendix III: Figures1. Comparing Variants of VARs for Burundi; 2. Comparing Variants of VARs for Kenya; 3. Comparing Variants of VARs for Rwanda; 4. Comparing Variants of VARs for Tanzania; 5. Comparing Variants of VARs for Uganda
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English
Additional Edition:
ISBN 1-4755-3057-9
Language:
English
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