Monetary Policy Channels and Industrial Production in Pakistan: Evidences based on ARDL Approach
Monetary policy is a significant component of economic management, with which we can control higher inflation, boost the economic growth and stabilize the other macroeconomic activities. This study investigates the channels of monetary policy affecting the industrial production using monthly data of...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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CSRC Publishing
2020-09-01
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| Series: | Journal of Accounting and Finance in Emerging Economies |
| Subjects: | |
| Online Access: | https://publishing.globalcsrc.org/ojs/index.php/jafee/article/view/1351 |
| _version_ | 1818806714902773760 |
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| author | Muhammad Tariq Mahmood Sadaf Shahab Saad Ali Rabbani |
| author_facet | Muhammad Tariq Mahmood Sadaf Shahab Saad Ali Rabbani |
| author_sort | Muhammad Tariq Mahmood |
| collection | DOAJ |
| description | Monetary policy is a significant component of economic management, with which we can control higher inflation, boost the economic growth and stabilize the other macroeconomic activities. This study investigates the channels of monetary policy affecting the industrial production using monthly data of Pakistan. In this regard, we have applied Bound test for co-integration to investigate the dynamic behaviour of the variables. Our results indicate that the consumer prices, money supply and money market rates are negatively effective for industrial production in the short-run. On the other hand, exchange rate has positive effect in short-run. The results also indicate that there is statistically significant and positive relationship between industrial output and money supply in the long-run, too. The adjustment mechanism suggests stability in the system and is statistically significant. Our results imply that the authorities should use expansionary monetary stance through money supply channel to boost the industrial sector. |
| first_indexed | 2024-12-18T19:14:10Z |
| format | Article |
| id | doaj.art-6fff1b34230040e397ea37b481e9cb37 |
| institution | Directory Open Access Journal |
| issn | 2519-0318 2518-8488 |
| language | English |
| last_indexed | 2024-12-18T19:14:10Z |
| publishDate | 2020-09-01 |
| publisher | CSRC Publishing |
| record_format | Article |
| series | Journal of Accounting and Finance in Emerging Economies |
| spelling | doaj.art-6fff1b34230040e397ea37b481e9cb372022-12-21T20:56:10ZengCSRC PublishingJournal of Accounting and Finance in Emerging Economies2519-03182518-84882020-09-0163Monetary Policy Channels and Industrial Production in Pakistan: Evidences based on ARDL ApproachMuhammad Tariq Mahmood0Sadaf Shahab1Saad Ali Rabbani2Assistant Professor, Department of Economics, Federal Urdu University of AS & T, IslamabadAssistant Professor, Department of Economics, Federal Urdu University of AS & T, IslamabadMPhil Scholar, Department of Economics, Federal Urdu University of AS & T, IslamabadMonetary policy is a significant component of economic management, with which we can control higher inflation, boost the economic growth and stabilize the other macroeconomic activities. This study investigates the channels of monetary policy affecting the industrial production using monthly data of Pakistan. In this regard, we have applied Bound test for co-integration to investigate the dynamic behaviour of the variables. Our results indicate that the consumer prices, money supply and money market rates are negatively effective for industrial production in the short-run. On the other hand, exchange rate has positive effect in short-run. The results also indicate that there is statistically significant and positive relationship between industrial output and money supply in the long-run, too. The adjustment mechanism suggests stability in the system and is statistically significant. Our results imply that the authorities should use expansionary monetary stance through money supply channel to boost the industrial sector.https://publishing.globalcsrc.org/ojs/index.php/jafee/article/view/1351Monetary policy, Industrial production, ARDL, expansionary |
| spellingShingle | Muhammad Tariq Mahmood Sadaf Shahab Saad Ali Rabbani Monetary Policy Channels and Industrial Production in Pakistan: Evidences based on ARDL Approach Journal of Accounting and Finance in Emerging Economies Monetary policy, Industrial production, ARDL, expansionary |
| title | Monetary Policy Channels and Industrial Production in Pakistan: Evidences based on ARDL Approach |
| title_full | Monetary Policy Channels and Industrial Production in Pakistan: Evidences based on ARDL Approach |
| title_fullStr | Monetary Policy Channels and Industrial Production in Pakistan: Evidences based on ARDL Approach |
| title_full_unstemmed | Monetary Policy Channels and Industrial Production in Pakistan: Evidences based on ARDL Approach |
| title_short | Monetary Policy Channels and Industrial Production in Pakistan: Evidences based on ARDL Approach |
| title_sort | monetary policy channels and industrial production in pakistan evidences based on ardl approach |
| topic | Monetary policy, Industrial production, ARDL, expansionary |
| url | https://publishing.globalcsrc.org/ojs/index.php/jafee/article/view/1351 |
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