Analyzing Various Channels of Monetary Policy Transmission Mechanism: The Case of Pakistan

Abstract

This paper analyzes Pakistan's monetary policy transmission mechanism by considering these channels: Interest rate Channel, Credit Channel, and Risk channel. In this study, an innovative channel, Risk Channel, is introduced to measure its impact on the monetary policy transmission mechanism by covering the annual time data from 1995 to 2020for Pakistan. This paper aims to examine the long-run and the short-run relationship between foreign debt, bank capital, and monetary policy transmission mechanism. To fulfill this objective, we intended to use Autoregressive Distributed Lag (ARDL) model to investigate long-run and short-run relations. As per the result, the risk channel represents that it is not following the cointegration benchmark. The coefficient is negative, but the probability is more significant than 0.05, which is statistically insignificant; therefore, there is no long-run relationship between the model variables. The interest rate channel represents that it ensures the benchmark of cointegration as the coefficient is negative, but the probability is less than 0.05, which is statistically significant; therefore, there is a long-run relationship between variables for the model. The credit channel represents that it ensures the cointegration benchmark as the coefficient is negative and statistically significant at 90%; therefore, there is a long-run relationship between variables for the model. However, the study concluded that risk channel has short-term relation and interest rate& credit channels have short-term and long-term relationships.

Credit Channel Transmission of Monetary Policy: How to Promote Growth in Indonesia?

“…The role of other monetary policy transmission channels such as expectations also needs to be considered. In the long run, the objective of monetary policy transmission is to stabilize both currency supply and output without negatively impacting economic growth (Fabris in Ghauri, Hamid, & Zaman, 2022).…”

The influence of potential outcome on entrepreneurs' decisions to participate in Crowdfunding in Pakistan (Karachi)

“…So, in this context, Crowdfunding is playing a significant role in ending all difficulties that have been raised in the way of acquiring capital for startups because it does not command any collateral asset or past credit history, and it also helps to reduce transaction costs and agency costs of fundraising by elimination of expensive traditional intermediaries and much more (Ghauri, SP. et al, 2022).…”

The Impact of Working Remotely on Employee Job Satisfaction: An SEM- PLS study of people working at universities

“…Studies have been conducted on various flexible work arrangements, and remote work (also known as home functioning and teleworking) is one of the most studied. However, most of this study's attention has been on remote work, where employees voluntarily perform some or all of their duties from home (or another location) for various reasons, including improved work-life balance (Ghauri, SP., et al, 2022). People who travel a long distance to get to work can cut down on their commute time by working remotely.…”