Bank lending channel for monetary policy transmission in Malaysia: An ARDL approach
The relevance of bank lending channel for the transmission process of monetary policy in Malaysia is investigated using the autoregressive-distributed lag (ARDL) model. The newly developed bounds test (Pesaran, et al. 2001) is employed to determine the specification of this model. Deposits tend to...
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Euro-American Association of Economic Development Studies
2007
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my.um.eprints.123902015-01-26T13:17:01Z http://eprints.um.edu.my/12390/ Bank lending channel for monetary policy transmission in Malaysia: An ARDL approach Goh, K.L. Chong, C.S. Yong, S.L. HB Economic Theory HG Finance The relevance of bank lending channel for the transmission process of monetary policy in Malaysia is investigated using the autoregressive-distributed lag (ARDL) model. The newly developed bounds test (Pesaran, et al. 2001) is employed to determine the specification of this model. Deposits tend to fall following contractionary monetary policy shocks, but banks are able to cushion their loan customers from the reduction in deposits through adjustments in liquid financial instruments. As such, these monetary shocks did not depress growth in loans. Although a shift is witnessed in the country’s interest rate regime as a policy response to the recent East Asian currency crisis, evidence was not found to support the effectiveness of the bank lending channel for the transmission of monetary policy. Euro-American Association of Economic Development Studies 2007 Article PeerReviewed Goh, K.L. and Chong, C.S. and Yong, S.L. (2007) Bank lending channel for monetary policy transmission in Malaysia: An ARDL approach. Applied Econometrics and International Development, 7 (2). pp. 221-234. ISSN 1578-4487 http://www.usc.es/economet/journals1/aeid/aeid7219.pdf |
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HB Economic Theory HG Finance Goh, K.L. Chong, C.S. Yong, S.L. Bank lending channel for monetary policy transmission in Malaysia: An ARDL approach |
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The relevance of bank lending channel for the transmission process of monetary policy in Malaysia is investigated using the autoregressive-distributed lag (ARDL) model. The
newly developed bounds test (Pesaran, et al. 2001) is employed to determine the specification of this model. Deposits tend to fall following contractionary monetary
policy shocks, but banks are able to cushion their loan customers from the reduction in deposits through adjustments in liquid financial instruments. As such, these monetary shocks did not depress growth in loans. Although a shift is witnessed in the country’s interest rate regime as a policy response to the recent East Asian currency crisis, evidence was not found to support the effectiveness of the bank lending channel for the transmission of monetary policy. |
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Article |
author |
Goh, K.L. Chong, C.S. Yong, S.L. |
author_facet |
Goh, K.L. Chong, C.S. Yong, S.L. |
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Goh, K.L. |
title |
Bank lending channel for monetary policy transmission in Malaysia: An ARDL approach |
title_short |
Bank lending channel for monetary policy transmission in Malaysia: An ARDL approach |
title_full |
Bank lending channel for monetary policy transmission in Malaysia: An ARDL approach |
title_fullStr |
Bank lending channel for monetary policy transmission in Malaysia: An ARDL approach |
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Bank lending channel for monetary policy transmission in Malaysia: An ARDL approach |
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bank lending channel for monetary policy transmission in malaysia: an ardl approach |
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Euro-American Association of Economic Development Studies |
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2007 |
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http://eprints.um.edu.my/12390/ http://www.usc.es/economet/journals1/aeid/aeid7219.pdf |
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