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Financial structure, institutional quality and monetary policy transmission: A Meta-Analysis

Author

Listed:
  • Bhattacharya, Rudrani

    (National Institute of Public Finance and Policy)

  • Tripathi, Shruti

    (National Institute of Public Finance and Policy)

  • Chowdhury, Sahana Roy

    (International Management Institute, Kolkata)

Abstract

The long-standing empirical literature of monetary policy transmission acknowledges weak transmission of monetary policy shock to real activities and inflation in emerging economies. Fragile financial system, low level of financial integration and weak institutions are often cited as the reasons for lack of monetary policy transmission in these economy. This paper investigates to what extent these factors explain the variation in the extent of monetary policy transmission in a comprehensive set of developed and developing economies using meta-analysis framework. We find that the degree of financial development captured by various financial indicators explain cross-country variations in the magnitude and time lag of monetary policy transmission. We also find the role of financial accelerator in transmission magnitude to output growth.

Suggested Citation

  • Bhattacharya, Rudrani & Tripathi, Shruti & Chowdhury, Sahana Roy, 2019. "Financial structure, institutional quality and monetary policy transmission: A Meta-Analysis," Working Papers 19/274, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:19/274
    Note: Working Paper 274, 2019
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    1. Tandon, Suranjali & Rao, R. Kavita, 2019. "Frontier analysis for State Excise in India," Working Papers 19/276, National Institute of Public Finance and Policy.
    2. Chakraborty, Lekha, 2019. "Gender Budgeting as PFM in OECD Countries: Empirical Evidence from Sweden," Working Papers 19/277, National Institute of Public Finance and Policy.

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    More about this item

    Keywords

    Financial developmen ; Institutions ; Monetary Policy Transmission ; Meta-Analysis;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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