IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2011-108.html
   My bibliography  Save this paper

Estimating a Small Open-Economy Model for Egypt: Spillovers, Inflation Dynamics, and Implications for Monetary Policy

Author

Listed:
  • Ms. Elif C Arbatli Saxegaard
  • Mr. Kenji Moriyama

Abstract

This paper estimates a small open economy model for Egypt to analyze inflation, output dynamics and monetary policy during 2005-2010. The interest rate channel is found to be relatively weak in Egypt, complicating the use of interest rates as the immediate target of monetary policy. However, the paper also finds a significant level of persistence in the policy rate, making monetary policy pro-cyclical. More active use of interest rate policy, measures to improve domestic debt markets and a gradual move towards inflation targeting can help support a successful disinflation strategy for Egypt.

Suggested Citation

  • Ms. Elif C Arbatli Saxegaard & Mr. Kenji Moriyama, 2011. "Estimating a Small Open-Economy Model for Egypt: Spillovers, Inflation Dynamics, and Implications for Monetary Policy," IMF Working Papers 2011/108, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2011/108
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=24837
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Al-Mashat Rania & Billmeier Andreas, 2008. "The Monetary Transmission Mechanism in Egypt," Review of Middle East Economics and Finance, De Gruyter, vol. 4(3), pages 32-82, September.
    2. Jonathan McCarthy, 2007. "Pass-Through of Exchange Rates and Import Prices to Domestic Inflation in Some Industrialized Economies," Eastern Economic Journal, Eastern Economic Association, vol. 33(4), pages 511-537, Fall.
    3. International Monetary Fund, 2011. "Bangladesh: Staff Report for the 2011 Article IV Consultation," IMF Staff Country Reports 2011/314, International Monetary Fund.
    4. International Monetary Fund, 2007. "Republic of Lithuania: Staff Report for the 2007 Article IV Consultation," IMF Staff Country Reports 2007/136, International Monetary Fund.
    5. Mr. Roberto Garcia-Saltos & Mr. Douglas Laxton & Michal Andrle & Haris Munandar & Charles Freedman & Danny Hermawan, 2009. "Adding Indonesia to the Global Projection Model," IMF Working Papers 2009/253, International Monetary Fund.
    6. International Monetary Fund, 2010. "Republic of Estonia: Staff Report for the 2009 Article IV Consultation," IMF Staff Country Reports 2010/004, International Monetary Fund.
    7. International Monetary Fund, 2009. "Adding Latin America to the Global Projection Model," IMF Working Papers 2009/085, International Monetary Fund.
    8. International Monetary Fund, 2011. "Chile: Staff Report for the 2011 Article IV Consultation," IMF Staff Country Reports 2011/260, International Monetary Fund.
    9. International Monetary Fund, 2010. "Peru: Staff Report for the 2010 Article IV Consultation," IMF Staff Country Reports 2010/098, International Monetary Fund.
    10. International Monetary Fund, 1999. "Colombia: Staff Report for the 1999 Article IV Consultation," IMF Staff Country Reports 1999/149, International Monetary Fund.
    11. International Monetary Fund, 2011. "Dominica: Staff Report for the 2011 Article IV consultation," IMF Staff Country Reports 2011/324, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Javier Gómez-Pineda & Mr. Dominique M. Guillaume & Kadir Tanyeri, 2015. "Systemic Risk, Aggregate Demand, and Commodity Prices," IMF Working Papers 2015/165, International Monetary Fund.
    2. Mr. Kenji Moriyama, 2011. "Inflation Inertia in Egypt and its Policy Implications," IMF Working Papers 2011/160, International Monetary Fund.
    3. Abouwafia, Hashem E. & Chambers, Marcus J., 2015. "Monetary policy, exchange rates and stock prices in the Middle East region," International Review of Financial Analysis, Elsevier, vol. 37(C), pages 14-28.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Okuda, Hidenobu & 奥田, 英信 & Poleng, Chea & Aiba, Daiju & 相場, 大樹, 2014. "Operational Efficiency and TFP Change of Major Cambodian Financial Institutions:A Data Envelopment Analysis during the 2006-2011 Period," Discussion Papers 2014-02, Graduate School of Economics, Hitotsubashi University.
    2. Fabian Bornhorst & Mr. Ashoka Mody, 2012. "Tests of German Resilience," IMF Working Papers 2012/239, International Monetary Fund.
    3. International Labour Office & International Institute for Labour Studies, 2011. "Tunisia : a new social contract for fair and equitable growth," Studies on Growth with Equity 467060, International Labour Office, Research Department.
    4. Ales Bulir & Jaromir Hurnik & Katerina Smidkova, 2013. "Inflation Reports and Models: How Well Do Central Banks Really Write?," Working Papers 2013/03, Czech National Bank.
    5. Bornhorst, Fabian & Mody, Ashoka, 2012. "Test of the German resilience," CFS Working Paper Series 2012/14, Center for Financial Studies (CFS).
    6. Schrader, Klaus & Laaser, Claus-Friedrich, 2012. "Die Krise in Südeuropa oder die Angst vor dem Dominoeffekt: Griechenland, Portugal und Spanien im Krisentest," Kiel Discussion Papers 500/501, Kiel Institute for the World Economy (IfW Kiel).
    7. OKUDA, Hidenobu & 奥田, 英信 & AIBA, Daiju & 相場, 大樹, 2014. "Determinants of Operational Efficiency and Total Factor Productivity Change of Major Cambodian Financial Institutions : A Data Envelopment Analysis during the Period of 2006-2013," Discussion Papers 2014-14, Graduate School of Economics, Hitotsubashi University.
    8. Corley-Coulibaly, Marva. & Khatiwada, Sameer. & Prasad, Naren. & Sekerler Richiardi, Pelin., 2011. "Tunisia : a new social contract for fair and equitable growth," Studies on Growth with Equity, International Labour Office, Research Department, number 994670603402676, April.
    9. OKUDA, Hidenobu & 奥田, 英信 & SHI, Minjie & 史, 敏傑, 2016. "Management Characteristics of Cambodian Microfinance Institutions: Operational Efficiency and Management Objectives," Discussion Papers 2016-03, Graduate School of Economics, Hitotsubashi University.
    10. Elsa Fornero, 2015. "Economic-financial Literacy and (Sustainable) Pension Reforms: Why the Former is a Key Ingredient for the Latter," Bankers, Markets & Investors, ESKA Publishing, issue 134, pages 6-16, January-F.
    11. Mr. Andrew Berg & Ms. Luisa Charry & Mr. Rafael A Portillo & Mr. Jan Vlcek, 2013. "The Monetary Transmission Mechanism in the Tropics: A Narrative Approach," IMF Working Papers 2013/197, International Monetary Fund.
    12. Sofronis Clerides, 2014. "The Collapse of the Cypriot Banking System: A Bird’s Eye View," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 8(2), pages 3-35, December.
    13. Kiichi Tokuoka, 2012. "Intergenerational Implications of Fiscal Consolidation in Japan," IMF Working Papers 2012/197, International Monetary Fund.
    14. Daniela Schwarzer, 2015. "Building the euro area's debt crisis management capacity with the IMF," Review of International Political Economy, Taylor & Francis Journals, vol. 22(3), pages 599-625, June.
    15. Andrés, Javier & Arce, Óscar & Thomas, Carlos, 2017. "Structural reforms in a debt overhang," Journal of Monetary Economics, Elsevier, vol. 88(C), pages 15-34.
    16. Kristina Spantig, 2015. "International monetary policy spillovers—can the RMB and the euro challenge the hegemony of the US dollar?," Asia Europe Journal, Springer, vol. 13(4), pages 459-478, December.
    17. Hend Al-Sheikh & S. Nuri Erbas, 2012. "The Oil Curse and Labor Markets: The Case of Saudi Arabia," Working Papers 697, Economic Research Forum, revised 2012.
    18. Cunha, Nuno. & Pellerano, Luca. & Mueller, Johannes. & Lledo, Victor. & Xiao, Yuan. & Gitton, Patrick., 2013. "Towards a Mozambican social protection floor : consolidating a comprehensive social protection system in Mozambique: analysis of policy alternatives and costs," ILO Working Papers 994838493402676, International Labour Organization.
    19. Sriram Balasubramanian & Mr. Paul Cashin, 2019. "Gross National Happiness and Macroeconomic Indicators in the Kingdom of Bhutan," IMF Working Papers 2019/015, International Monetary Fund.
    20. Ilham Haouas & Raimundo Soto, 2012. "Has the UAE Escaped the Oil Curse?," Documentos de Trabajo 412, Instituto de Economia. Pontificia Universidad Católica de Chile..

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:2011/108. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.