Credit Channel of Monetary Policy Transmission: Evidence from Pakistan

Muhamamd Naeem; Arif Saleem Cheema

Abstract:

This paper estimates the transmission of monetary policy through bank credit channel in the context of Pakistan. For analysis purpose bound testing co-integration analysis and Error Correction Model is used with General to specific approach. Monthly data for the period of 2002 to 2012 is used in this study. Results of this study appear that bank credit channel does not provide additional leverage to authorities for the conduct of monetary policy. It means that increase in interest rate does not decrease the bank credits because banks make adjustment against monetary policy shocks by using their liquid financial instruments.

research from:

• Foundation University - Faculty of Management Sciences

Year:

2019

Type of Publication:

Article

Journal:

Journal of Managerial sciences

Volume:

13

Number:

3

Pages:

143-148

Month:

9