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Monetary Policy Reaction to COVID-19 and Their Economic Impact in Central America and the Dominican Republic

Author

Listed:
  • Jesús Antonio López Cabrera
  • Enrique González Mata
  • Juan Quiñonez Wu

Abstract

This study aims to recognize and succinctly evaluate the monetary policy implemented during the COVID-19 pandemic, as well as in the immediate recovery period, and their economic impact in Central America and the Dominican Republic (CARD). To this end, the study carries out a qualitative and quantitative analysis of the monetary policy implemented to reduce the negative economic impact on CARD, during the period 2020–2022. VAR and panel econometric techniques were used for the analysis. The results show that even though the central banks of CARD countries did indeed seek to stimulate economic activity, the effects on aggregate economic activity are very small. Other types of policies, such as fiscal, financial, and regulatory policies, may have contributed to reducing to a greater extent the negative impact of the COVID-19 pandemic on economic activity. JEL Codes : E52, G01, C54

Suggested Citation

  • Jesús Antonio López Cabrera & Enrique González Mata & Juan Quiñonez Wu, 2025. "Monetary Policy Reaction to COVID-19 and Their Economic Impact in Central America and the Dominican Republic," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 24(1), pages 7-36, March.
    • Handle: RePEc:sae:emffin:v:24:y:2025:i:1:p:7-36
    DOI: 10.1177/09726527241257755
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    More about this item

    Keywords

    Monetary policy; COVID-19; Central America countries; Dominican Republic; VAR; Panel VAR;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G01 - Financial Economics - - General - - - Financial Crises
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling

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