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ON THE DESIGN AND EFFECTS OF MONETARY POLICY IN THE MIDDLE EAST

International Journal of Economics, Management and Accounting

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Title ON THE DESIGN AND EFFECTS OF MONETARY POLICY IN THE MIDDLE EAST
 
Creator Kandil, Magda
 
Description In trying to evaluate the autonomy of central banks in the Middle East, the paper examines the determinants and implications of monetary policy across a sample of countries in the region: Algeria, Egypt, Jordan, Kuwait, Morocco, Saudi Arabia, Syria and Tunisia. Monetary policy is often established as a tool to facilitate government objectives. However, some of the announced objectives - price stability, economic growth, and full employment - may be contradictory. The governments may then set the reaction function for the monetary authority to devote more attention to specific objectives that they judge to be more urgent for economic performance. Models that attempt to identify the reaction function for the monetary authority differentiate between two types of policies: rules or accommodative policies versus discretion or stabilizing policies. An accommodative policy provides a regular supply of credit to an expanding economy. A stabilizing policy, in contrast, varies the money supply to counter shocks that may deviate the economy from its objectives. The present paper seeks to shed some light on the design of monetary policy across countries that have kept a sufficient data record for empirical investigation. The empirical investigation proceeds in two steps. The first step seeks to identify the reaction function for the design of monetary policy. The second step seeks to evaluate the varying effects of monetary policy in the light of variations in the policy design. Specifically, empirical models are estimated to identify the effects of growth in money supply on real output growth and price inflation.JEL classification: E51, E52, E58, N15Key words: Monetary policy, Economic growth, Middle-East countries
 
Publisher Kulliyyah of Economics and Management Sciences
 
Date 2013-02-27
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://journals.iium.edu.my/enmjournal/index.php/enmj/article/view/65
 
Source International Journal of Economics, Management and Accounting; Vol 9 No 1 (2001)
2462-1420
 
Language eng
 
Relation http://journals.iium.edu.my/enmjournal/index.php/enmj/article/view/65/50