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Openness and the Effectiveness of Monetary Policy: A Cross-country Analysis

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  • Hakan Berument
  • Nazli Konac
  • Ozge Senay

Abstract

This paper evaluates the relationship between a country's openness to trade and the effectiveness of monetary policy in changing output growth and inflation in 29 different countries. Using quarterly data from the 1957-2003 period, empirical estimates based on individual country specifications show that the direction, significance and nature of the relationship between openness and the effectiveness of monetary policy on output growth as well as inflation vary considerably across countries.

Suggested Citation

  • Hakan Berument & Nazli Konac & Ozge Senay, 2007. "Openness and the Effectiveness of Monetary Policy: A Cross-country Analysis," International Economic Journal, Taylor & Francis Journals, vol. 21(4), pages 577-591.
    • Handle: RePEc:taf:intecj:v:21:y:2007:i:4:p:577-591
    DOI: 10.1080/10168730701699018
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    References listed on IDEAS

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    5. Lane, Philip R., 1997. "Inflation in open economies," Journal of International Economics, Elsevier, vol. 42(3-4), pages 327-347, May.
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    7. Temple, Jonathan, 2002. "Openness, Inflation, and the Phillips Curve: A Puzzle," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(2), pages 450-468, May.
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    Cited by:

    1. Ekpo, Akpan H. & Effiong, Ekpeno L., 2017. "Openness and the Effects of Monetary Policy in Africa," MPRA Paper 80847, University Library of Munich, Germany.
    2. Jeleta Kebede & Saroja Selvanathan & Athula Naranpanawa, 2024. "Financial inclusion and monetary policy effectiveness in a monetary union: Heterogenous panel approach," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 32(3), pages 779-805, July.
    3. Luangaram, Pongsak & Wongpunya, Nipit, 2024. "The effect of trade openness and exchange rate on inflation targeting in Thailand," Journal of Asian Economics, Elsevier, vol. 92(C).
    4. ali, ramsha, 2016. "Impact of inflation on the monetary policy: case study of Pakistan," MPRA Paper 92362, University Library of Munich, Germany.
    5. Ferdinand Ahiakpor & William Cantah & William Brafu-Insaidoo & Eric Bondzie, 2019. "Trade Openness and Monetary Policy in Ghana," International Economic Journal, Taylor & Francis Journals, vol. 33(2), pages 332-349, April.

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    Keywords

    Openness; monetary policy;

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