The monetary transmission mechanism in Pakistan: a sectoral analysis

Alam, Tasneem and Waheed, Muhammad (2006): The monetary transmission mechanism in Pakistan: a sectoral analysis. Unpublished.

Abstract

The present paper takes a first step in investigating the monetary transmission mechanism in Pakistan at a sectoral level. Using quarterly data spanning from 1973:1 to 2003:4, we examine whether monetary policy shocks have different sectoral effects. Taking note of structural transformation of the economy and the monetary and financial reforms during 1990s, we also assess whether the reform process has notable impact on the monetary transmission mechanism. We find evidence supporting sector-specific variation in the real effects of monetary policy. Our results also suggest significant changes in the transmission of monetary shock to real sector of the economy during post-reform period.

• Item Type: MPRA Paper
• Institution: Pakistan Institute of Development Economics
• Language: English
• Keywords: Monetary transmission mechanism; VAR; Pakistan; Sectoral analysis
• Subjects: C - Mathematical and Quantitative Methods > C2 - Econometric Methods: Single Equation Models; Single Variables > C22 - Time-Series Models; Dynamic Quantile Regressions ; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy (Targets, Instruments, and Effects)