- Title
- Effectiveness of monetary policy transmission mechanism: the case of selected SADC countries
- Creator
- Tengwa, Anakho https://orcid.org/0000-0002-0700-8668
- Subject
- Monetary policy -- Africa, Southern
- Subject
- Transmission mechanism (Monetary policy) -- Africa, Southern
- Subject
- Economic development -- Africa, Southern
- Date
- 2022-12
- Type
- Master's theses
- Type
- text
- Identifier
- http://hdl.handle.net/10353/26863
- Identifier
- vital:66037
- Description
- Monetary policy plays a significant role in countries economic development. The variability in inflation in the SADC region provides room to question the Effectiveness of the transmission of monetary policy as these countries experience inflation in different ways. The study analyses the effectiveness of monetary policy transmission mechanism on the selected 5 SADC countries, South Africa, Botswana, Mauritius, Tanzania, and Zambia. The selection of the countries was mainly based on data availability. To answer the study hypothesis, the study used secondary data from different data sources, employing the Vector Autoregression Regression. The different channels analysed include the exchange rate, interest rates as well as credit channel to measure monetary policy tools. The main variables are, Gross Domestic Product (GDP), Consumer Price Index (CPI)cpi and money supply. Panel unit root was tested to test the stationarity of the variables and the appropriate lag length was determined. Panel VAR model was estimated where the focus was mainly on variance decomposition and impulse response. Then lastly the stability of the model was tested using diagnostic test. The results revealed that interest rates channel and exchange rate channel have a more significant effect in explaining the transmission of macroeconomic shock to the rest of the economy through gpd and cpi. While the credit channel mostly transmits to the rest of the economy through money supply and cpi, its effects from GDP are rather insignificant. It is also noted that interest rates serve as the dominant channel in transmitting monetary policy shocks to the rest of the economy. When central banks decrease prime lending rates for commercial banks, this is passed to consumers making it less expensive to borrow. In the long run, attracts foreign investors which harms the domestic currency. The author has noted that future research could focus on how asset price channel affects the economy.
- Description
- Thesis (MCom) -- Faculty of Management and Commerce, 2022
- Format
- computer
- Format
- online resource
- Format
- application/pdf
- Format
- 1 online resource (xi, 68 pages)
- Format
- Publisher
- University of Fort Hare
- Publisher
- Faculty of Management and Commerce
- Language
- English
- Rights
- rights holder
- Rights
- All Rights Reserved
- Rights
- Open Access
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Collections
UFH Department of Economics
| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details | SOURCE1 | Tengwa_201502026_Economics_.pdf | 1 MB | Adobe Acrobat PDF | View Details |