Interest rates targeting of monetary policy: An open economy SVAR study of Malaysia

Zulkefly Abdul Karim, Bakri Abdul Karimb

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

This paper examines the implementation of monetary policy during the interest rates targeting in a small-open economy (i.e. Malaysia) by using an open-economy structural VAR (SVAR) study. It tests the effect of foreign shocks upon domestic macroeconomic fluctuations and monetary policy, and examines how effective monetary policy is in influencing macroeconomic variables. The results show that during interest rates targeting, monetary policy plays a significant role in affecting macroeconomics variables. This finding suggests that monetary policy has an important role as a stabilization policy in a smallopen economy.

Original languageEnglish
Pages (from-to)1-22
Number of pages22
JournalGadjah Mada International Journal of Business
Volume16
Issue number1
Publication statusPublished - 1 Jan 2014

Fingerprint

Interest rates
Malaysia
Structural VAR
Monetary policy
Targeting
Open economy
Macroeconomic variables
Small open economy
Macroeconomic fluctuations
Stabilization policy

Keywords

  • Interest rates targeting
  • Monetary policy
  • Open-economy
  • SVAR

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics

Cite this

Interest rates targeting of monetary policy : An open economy SVAR study of Malaysia. / Abdul Karim, Zulkefly; Karimb, Bakri Abdul.

In: Gadjah Mada International Journal of Business, Vol. 16, No. 1, 01.01.2014, p. 1-22.

Research output: Contribution to journalArticle

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