Lost in Transmission? The Effectiveness of Monetary Policy Transmission Channels in the GCC Countries

Cevik, Serhan; Teksoz, Katerina

doi:10.1142/s1793812013500181

Cited by 24 publications

(24 citation statements)

References 22 publications

(27 reference statements)

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“…For Saudi Arabia and Kuwait we follow Cevik and Teksoz (2012) in using the three month interbank rate because it is the only rate available for the full sample period.…”

Section: Data and Model Speci Cationmentioning

confidence: 99%

“…For the members of the Gulf Cooperation Council (GCC), Kuwait, Oman and Saudi Arabia, the emphasis of these studies is mainly on the traditional monetary transmission mechanisms such as the interest rate and bank lending channels. For instance Cevik and Teksoz (2012) nd that these channels are relatively e ective in in uencing non-hydrocarbon output and consumer prices while the exchange rate channel does not appear to play an important role. Prasad and Espinoza (2012) examine the pass-through of policy rates to retail rates and nd that it is on the low side.…”

Section: Introductionmentioning

confidence: 98%

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Monetary policy, exchange rates and stock prices in the Middle East region

Abouwafia

Chambers

2015

International Review of Financial Analysis

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A structural vector autoregressive model is employed to investigate the impact of monetary policy and real exchange rate shocks on the stock market performance of Kuwait, Oman, Saudi Arabia, Egypt and Jordan. In order to identify the structural shocks both short run and long run restrictions are applied. Unlike previous literature the contemporaneous interdependence between the nancial variables are left unrestricted to give a more accurate depiction of the relationships. The heterogeneity of the results re ect the di erent monetary policy frameworks and stock market characteristics of these countries. Mainly, monetary policy and the real exchange rate shocks have a signi cant short run impact on the stock prices of the countries that apply a relatively more independent monetary policy and exible exchange rates.JEL classi cation: C32; E52; G18

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“…For Saudi Arabia and Kuwait we follow Cevik and Teksoz (2012) in using the three month interbank rate because it is the only rate available for the full sample period.…”

Section: Data and Model Speci Cationmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 98%

Monetary policy, exchange rates and stock prices in the Middle East region

Abouwafia

Chambers

2015

International Review of Financial Analysis

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“…The results of these tests are summarized in table (5). Res pons e of D(RGDP_SA,1) to D(REER_SA, 1) Response to Cholesky One S.D.…”

Section: -3-2-effects Of Financial Cycles On the Real Economymentioning

confidence: 99%

The Synchronization of Financial and Business Cycles in Saudi Arabia

El-Baz

2018

SIJMD

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Financial cycles have become vividly tracked and analyzed by regulatory authorities to avoid the buildup of excessive systemic risks in the financial system that could hamper economic growth. However, fiscal policy usually pays an exclusive attention to business cycles; which might leave fiscal outcomes vulnerable to financial sector dynamics. We investigated financial and business cycles in Saudi Arabia over the period (1970Q1-2016Q4). The results of the BBQ cycle dating algorithm revealed that the duration of financial upturns (downturns) are longer than that for economic expansions (contractions) in means, also both the amplitude and the slope for upturns (downturns) are higher than those for expansions (contractions) in means. Moreover, financial cycle episodes are more frequent than business cycle episodes. Finally, we found empirical evidence that financial (credit) conditions are crucial for economic stability. Fiscal policy can play an important role in fostering economic growth going forward through the implementation of a countercyclical policy that allows for the accumulation of fiscal buffers and releasing them during periods of an economic slowdown, the setup of early warning systems for business and financial cycles, and the introduction of fiscal rules to limit the scope for a procyclical fiscal stance.

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“…However, this margin can vary over time, and also vary additionally from bank to bank due to many reasons such as competitive conditions in the markets and the size of the bank. Accordingly, it is clear that the deposit rates of the banks do not normally change in response to policy changes alone (Cevik S and Teksoz K, 2012).…”

Section: The Market Interest Ratesmentioning

confidence: 99%