The Impact of Bank Credit on Inflation in Jordan by Using Vector Auto Regression Model: A Case Study of Jordan during 1968-2017

Al-Oshaibat, Suleiman Daood; Banikhalid, Hmood H.

doi:10.5539/ibr.v12n5p34

Cited by 3 publications

(1 citation statement)

References 3 publications

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“…Nonrestricted SVAR models have been found to have better predictive power than restricted ones (Sumarminingsih, Suharsono, Ruchjana, & Stiawan, 2019). Additionally, research using VAR has been conducted to investigate the explanatory power of bank credit on inflation rates in Jordan, and it was concluded that there is a positive effect of bank credit on the inflation rate (Al-Oshaibat & Banikhalid, 2019).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Inflation dynamics in the USA and EU: VAR analysis and forecasting

Cicmil

2023

Int J Econ Practice & Policy

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This paper aims to analyze the relationship between the inflation rate in the USA and the inflation rate in the EU and to make short-term forecasts of their future movements. The Vector Autoregression (VAR) model was used to study the dynamic relationships among multiple variables. The VAR model was fitted on the data with a maximum lag of 5, and the diagnostic checks were performed to ensure it was correctly specified. The results are presented and discussed and the paper concludes by suggesting that future research should focus on addressing the problem of non-stationarity in the residuals and on testing the robustness of the model.

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Section: Theoretical Backgroundmentioning

confidence: 99%

Inflation dynamics in the USA and EU: VAR analysis and forecasting

Cicmil

2023

Int J Econ Practice & Policy

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What Drives Inflation in High-inflation Countries? Evidence from Haiti, Sudan, Türkiye and Zambia

Mucuk¹,

Evren²

2023

Politicka ekonomie

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The main purpose of this paper is to investigate the long-term effects of money supply, economic growth, interest rate, exchange rate, domestic credits and the oil price on inflation in Haiti, Sudan, Türkiye and Zambia, which are among the world's highest-inflation countries according to 2021 data. For this purpose, a panel cointegration approach is applied where fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) techniques are employed to explore the long-term effects with the help of annual data for the period 2000-2019. Also, the Dumitrescu and Hurlin panel causality test is used to determine whether there is a causality from these variables to inflation. The empirical findings show that there is a long-term relationship among these variables for the whole panel. The consequences from the FMOLS and DOLS estimates show that (i) money supply has a positive effect on inflation, (ii) economic growth affects inflation positively, (iii) an increase in the exchange rate causes inflation to rise, (iv) the oil price affects inflation positively, (v) interest rate affects inflation negatively, and (vi) domestic credits have a negative effect on inflation. In this context, we find that the exchange rate is the variable that has the greatest effect on inflation. Moreover, the findings of the panel causality test suggest that there is a causal relationship from money supply, economic growth, exchange rate and the oil price to inflation.

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A Structural Vector Autoregression Exploration of South Africa’s Monetary and Macroprudential Policy Interactions

Magubane,

Nzimande

2024

Economies

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Interactions between monetary and macroprudential policy are crucial in safeguarding price and financial stability. This study investigates the macroeconomic and financial impacts of monetary and macroprudential policy interactions in South Africa, a leading African economy in developing macroprudential frameworks. The existing literature largely focuses on the effectiveness of these policies independently, leaving a gap in understanding how their interaction affects their overall efficacy. Employing a Structural Vector Autoregression (SVAR) model and utilizing data from 1980 to 2023, this study uniquely incorporates the financial cycle to represent financial developments. The results reveal significant effects of both policies on key variables such as output, the financial cycle, and the price level. Specifically, policy contractions reduce output and the financial cycle but increase the price level, illustrating the ‘price puzzle’. This study further identifies an endogenous response between the two policies: monetary policy reacts by rising to reduce price levels following a macroprudential shock, while macroprudential policy rises to stimulate financial activity after a monetary shock. These findings underscore the importance of using both policies in conjunction but in opposite directions to balance their effects and achieve price and financial stability. This study suggests that an optimal combination of monetary and macroprudential policies is critical for maintaining macroeconomic equilibrium.

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The Impact of Bank Credit on Inflation in Jordan by Using Vector Auto Regression Model: A Case Study of Jordan during 1968-2017

Cited by 3 publications

References 3 publications

Inflation dynamics in the USA and EU: VAR analysis and forecasting

Inflation dynamics in the USA and EU: VAR analysis and forecasting

What Drives Inflation in High-inflation Countries? Evidence from Haiti, Sudan, Türkiye and Zambia

A Structural Vector Autoregression Exploration of South Africa’s Monetary and Macroprudential Policy Interactions

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