Monetary Transmission in Developing Countries : Evidence from India /

We examine the strength of monetary transmission in India, using a conventional structural VAR methodology. We find that a tightening of monetary policy is associated with a significant increase in bank lending rates and conventional effects on the exchange rate, though pass-through to lending rates...

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Bibliographic Details
Main Author: Mishra, Prachi
Other Authors: Montiel, Peter, Sengupta, Rajeswari
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2016.
Series:IMF Working Papers; Working Paper ; No. 2016/167
Online Access:Full text available on IMF
Description
Summary:We examine the strength of monetary transmission in India, using a conventional structural VAR methodology. We find that a tightening of monetary policy is associated with a significant increase in bank lending rates and conventional effects on the exchange rate, though pass-through to lending rates is only partial and exchange rate effects are weak. We could find no significant effects on real output or the inflation rate. Though the message for the effectiveness of monetary transmission in India is therefore mixed, our results for India are more favorable than is often found for other developing countries.
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Physical Description:1 online resource (68 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Access:Electronic access restricted to authorized BRAC University faculty, staff and students