Qayyum, Abdul (2008): Does Monetary Policy Play Effective Role in Controlling Inflation in Pakistan.
Download (49kB) | Preview
This paper presented the salient features of current Monetary Policy and its effectiveness to control inflation in Pakistan. The monetary authority was successful in controlling inflation when it successfully controlled the money supply target. The calculation of money supply target needs to be improved to get appropriate target level of M2. It is also concluded that in the recent years SBP failed to control money supply and hence rate of inflation within the set target level. There seems to be a lack of coordination between Fiscal and Monetary Authorities. The understanding of issues regarding monetary policy transmission mechanism, effectiveness of different channels, lag structure of monetary policy changes, magnitude of pass-through of policy changes to inflation and output and nature of relationship amongst, instruments and goals of monetary policy (inflation and output) seems to be lacking and need fresh investigation.
|Item Type:||MPRA Paper|
|Original Title:||Does Monetary Policy Play Effective Role in Controlling Inflation in Pakistan|
|Keywords:||Monetary Policy, Pakistan, Money Supply, Inflation|
|Subjects:||E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation
E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies
E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy
|Depositing User:||Abdul Qayyum|
|Date Deposited:||30. Jan 2009 11:59|
|Last Modified:||11. Feb 2013 22:59|
Akhtar, S. (2006) Pakistan—Economic Outlook and Prospects, Speech Delivered at the Adam Smith Institute, Thun, Switzerland, June 27.
Bailey, M. J. (1956) The Welfare Cost of Inflationary Finance. Journal of Political Economy 64, 93–110.
Bernanke, B. S. (2005) Inflation in Latin America—A New Era?, Remarks at the Stanford Institute for Economic Policy Research Economic Summit, February 11, 2005. Available via the Internet at: http://www.federalreserve.gov/boarddocs/ speeches/2005/20050211/default.htm.
Bernanke, B. S., T. Laubach, F. S. Mishkin and A. S. Posen (1999), “Inflation Targeting: Lessons from the International Experience”, Princeton, NJ: Princeton Universality Press.
Blejer, M. I., and A. M. Leone (2000) Introduction and Overview, In Blejer, et al. Inflation Targeting in Practice: Strategic and Operational Issues and Application to Emerging Economies. Washington, D. C.: International Monetary Fund.
Blejer, M. I., A. Ize, A. M. Leone, and S. Werlang (2000) Inflation Targeting in Practice: Strategic and Operational Issues and Application to Emerging Economies. Washington, D. C.: International Monetary Fund.
Blinder, A., C. Goodheart, P. Hildebrand, D. Lipton and C. Wyplosz (2001), How Does Central Bank Talk? Geneva Report on the World Economy 3, ICMB and CEPR.
Cecchetti, S. G. (2000) Making Monetary Policy: Objectives and Rules, Oxford Review of Economic Policy 16:4, 43–59.
Fischer, S. and F. Modigliani (1978a) Towards Understanding of the Costs of Inflation, In K. Brunner and A. H. Meltzer (ed.) The Costs and Consequences of Inflation. Carnegie-Rochester Conference Series on Public Policy, Vol. 15, 5–42.
Fischer, S. and F. Modigliani (1978b) Towards Understanding of the Real Effects and the Costs of Inflation, Weltwirtschaftliches Archiv 114, 810–832.
Friedman, M. (1963) Inflation: Causes and Consequences, New York: Asia Publishing House
Geraats, P. M. (2005a), “Transparency of Monetary Policy: Does the Institutional Framework Matter? (Mimeographed)
Goodfriend, M. (2000) Maintaining Low Inflation: Rationale and Reality, In Blejer, et al. Inflation Targeting in Practice: Strategic and Operational Issues and Application to Emerging Economies, International Monetary Fund
Hahn, V. (2002), “The Transparency of the Central Bank Objectives (Mimeographed). Pakistan, Government of (Various Issues) Pakistan Economic Survey, Ministry of Finance, Government of Pakistan
Khan, M. Arshad and A. Qayyum (2007), “Trade, Financial and Growth Nexus in Pakistan”, Economic Analysis Working Papers, Vol. 6, No. 14.
Khan, A. H. and M. A. Qasim (1996) Inflation in Pakistan Revisited, The Pakistan Development Review 35:4, 747–759.
Khan, S. (2007), “Channels and Lags iIn Effects of Monetary Policy’s Transmission Mechanism: A Case of Pakistan”, Unpublished Ph.D Dissertation (Pakistan Institute of Development Economics, Islamabad).
Khawaja, M. I. and Musleh ud Din (2007) “Banking: Interest Rate Spread, Inelastic Deposit Supply and Mergers” The Pakistan Development Review, Vol. 45, No. 4, pp. 1055-1070.
King, M. (1999) Challenges for Monetary Policy: New and Old, in New Challenges for Monetary Policy, Proceedings of the Symposium sponsored by the Federal Reserve Bank of Kansas City
Liviatan, N. (2003) Fiscal Dominance and Monetary Policy Dominance in the Israeli Monetary Experience, Bank of Israel Discussion Paper No.2003.17.
Malik, W. S. and Ahmed, M. A. (2007) Taylor Rule and Macroeconomics Performance in Pakistan, Pakistan Institute of Development Economics Working Paper No.34
Qayyum, A. (2006) Money, Inflation and Growth in Pakistan, the Pakistan Development Review, 45:2, 203-212
Qayyum, A. and Faiz Bilques (2005) P-star Model: A Leading Indicator of Inflation for Pakistan, the Pakistan Development Review, 44:2, 117-129
Qayyum, A., Khan, S. and Khawaja, M. I. (2005), “Interest Rate Pass-through in Pakistan: Evidence from transfer Function Approach”, The Pakistan Development Review, Vol. 44, No. 4, pp. 975-1001.
Roll, E. et al. (1993), Independent and Accountable: A New Mandate for the Bank of England, London. Centre for Economic Policy Research.
Sherani, S. (2005) The Dark Side of the Force, ABN-AMRO, Economic Focus—Pakistan. Monday, May 30. State Bank of Pakistan (2006) Monetary Policy Statement, State Bank of Pakistan