Monetary policy and economic growth in Ghana: Does financial development matter?

Sena, Prince Mike; Asante, Grace Nkansa; Brafu‐Insaidoo, William Gabriel

doi:10.1080/23322039.2021.1966918

Cited by 6 publications

(4 citation statements)

References 25 publications

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“…Apanisile and Osinubi (2020) study results demonstrated that FD positively influenced the monetary policy effectiveness in Nigeria over 2004: Q1 to 2016: Q4. The empirical findings of ARDL model used by Sena et al (2021) revealed that Ghana's FD boosted the influence of MP on economic growth from 1980 to 2016. Jiang et al (2022) observed that digital finance has a positive influence on monetary policy in emerging economies.…”

Section: Empirical Literaturementioning

confidence: 99%

Monetary policy effectiveness in Asian developing economies: the moderating role of financial sector development

Azam

Khan

Saleem

2023

JFEP

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Purpose This study aims to explore the impact of monetary policy on bank lending rate with the moderating effects of financial sector development for eight Asian developing economics. Design/methodology/approach This study uses panel autoregressive distributed lag/pooled mean group estimation over the period ranging from 1980 to 2020. Findings The empirical results exhibit an inverse link between monetary policy measured by broad money supply on the bank lending rate, indicating that the increase in the money supply by the central bank lowers the demand for loans and thereby lowers the cost of loan. Moreover, financial sector development decreases the lending rate and thus lowers cost of loan. It is also noted that the interactive term of monetary policy by lending broad money supply and financial sector development showed a positive impact on the lending rate in selected Asian developing countries during the period under the study. Practical implications The outcomes have many relevant policy implications that stronger financial development sector contributes to the efficiency of monetary policy. Regulators and policymakers are therefore recommended to pursue greater financial sector development to lower the cost for fund searchers and to lower the cost of loans, money supply increase is suggested. Originality/value This study contributes to the extant literature on the factors affecting lending rate with the prime aims of monetary policy effectiveness. This study also included financial sector development with some other variables and an interactive term of monetary policy with financial development to have new insight impact of both on the lending rate in developing Asian economies.

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Section: Empirical Literaturementioning

confidence: 99%

Monetary policy effectiveness in Asian developing economies: the moderating role of financial sector development

Azam

Khan

Saleem

2023

JFEP

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“…Moreover, it can lead to reduced consumer spending and lower business confidence, further exacerbating economic (Sena et al, 2021).…”

Section: Introductionmentioning

confidence: 99%

“…Developing countries often face challenges related to their macroeconomic performance, which refers to the overall behavior and trends in the economy at a national level (Sena et al, 2021).…”

Section: Introductionmentioning

confidence: 99%

Effect of Monetary Policy on the Economic Growth of Ethiopia: An Autoregressive Distributed Lag (ARDL) Approach

Abdulkadr,

Asnakew,

Sendkie

et al. 2024

Preprint

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This study analyze the effect of monetary policy. To address this objective this study employed ARDL and error correction model (ECM) based on annual data from 1993 to 2022. Granger causality test was also employed to check the direction of causal effects of one variable on the other variable. All required pre and post estimation test were performed and verified that the model was statistical viable. The study revealed that, In short run, deposit interest rate, reserve required amount and open market operation have positive and statistically significant effects on real GDP growth of Ethiopia, however, money supply have negative and statistically significant effects on real GDP growth of Ethiopia. In long run, money supply have positive and statistically significant effects on real GDP growth of Ethiopia, however, deposit interest rate and reserve required have negative and statistically significant effects on real GDP growth of Ethiopia. To sum up, in short run contractionary monetary policy was promising and in long run expansionary monetary policy was favorable effect on economic growth. The Granger causality test result shows that there is bidirectional causality between monetary policy and economic growth; except there was unidirectional relationship between deposit interest rate and economic growth. Ultimately, this research suggests the following policy recommendation: for short-term economic enhancement, it is advisable for the government to opt for a contractionary monetary policy rather than an expansionary one. On the other hand, for long-term economic improvement, an expansionary monetary policy is more favorable than a contractionary one.

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“…These channels consist of short-and long-term interest rate channels, credit channel, exchange-rate channel, asset channel, and balance-sheet channel. The main monetary policy transmission channel (specifically developing countries) stresses on short-term interest rate pass-through 7 (Cottarelli and Kourelis (1994); Angeloni et al, 2003;Chmielewski, 2004;Rasche and Williams, 2007;Basci et al, 2008;Betancourt et al, 2008;Egert and MacDonald, 2009;Ornek, 2009;Mishra and Montiel, 2012;Seth and Kalyanaraman, 2017;Rashid et al, 2020;Sena et al, 2021;Sethy and Goyari, 2022;Ramedoust et al, 2023) 8 . Thus, this study aims to test short-term interest rate pass-through.…”

mentioning

confidence: 99%

The Effectiveness of Monetary Policy and Financial Stability: Critical Perspective from South Mediterranean Countries

A. Elsherif

2024

المجلة العلمية للدراسات التجارية والبيئية

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This paper examines the relationship between the effectiveness of monetary policy and financial stability for south Mediterranean economies. The study employs annual panel data ranging from 2000-2022 for a set of variables (Z-Score, money market interest rate, GDP growth, consumer price index and real effective exchange rate). Cointegration analysis suggests no longterm relationships among the variables, leading to the use of a Vector Autoregressive (VAR) model to capture short-term dynamics. Results indicate that changes in interest rates have a negative impact on financial stability, affecting borrowing costs, debt servicing and asset valuations, However, GDP growth indirectly influences financial stability. Fluctuations in consumer prices can impact financial stability through inflationary pressures and monetary policy measures. While, changes in the real effective exchange rate affect export competitiveness, external debt burden, and overall macroeconomic stability. The study suggests that by understanding the short-term interdependencies and the effects of external factors, policymakers and financial institutions can make The Effectiveness of Monetary Policy and Financial Stability: Critical … Dr/ Marwa A. Elsherif ‫عشر‬ ‫الخامس‬ ‫المجلذ‬ ‫األول‬ ‫العذد‬ -‫يناير‬ 4246 586informed decisions to promote and maintain stability in the financial system.

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Monetary policy and economic growth in Ghana: Does financial development matter?

Cited by 6 publications

References 25 publications

Monetary policy effectiveness in Asian developing economies: the moderating role of financial sector development

Monetary policy effectiveness in Asian developing economies: the moderating role of financial sector development

Effect of Monetary Policy on the Economic Growth of Ethiopia: An Autoregressive Distributed Lag (ARDL) Approach

The Effectiveness of Monetary Policy and Financial Stability: Critical Perspective from South Mediterranean Countries

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