Abstract

This paper empirically analyzed the monetary policy transmission mechanism for wealth channels by applying Vector Auto Regressive (VAR) technique to time series data for the period of 1991 Q1 to 2018 Q4. Results are found significant. Variables included in the model follow the same direction as the theory suggests. Standard deviation shocks to each variable in variance decomposition results are bitterly transmitted. The performance of this channel on the biases of impulse responses and variance decomposition is better. Policy decisions related to high interest rates should be taken carefully. The level of savings is very poor. Low saving adversely affects investment and GDP. Therefore, better remedies are needed to capture the problem.

Authors

1-Haroon Khan
Higher Education Department Khyber Pakhtunkhwa Pakistan.

2-Amjad Amin
Assistant Professor, Department of Economics, University of Peshawar, KP, Pakistan.

Keywords

Wealth, Monetary Policy, Transmission Mechanism, Channels

DOI Number

10.31703/ger.2022(VII-II).03

Page Nos

20 − 32

Volume

VII

Issue

II