No description available.

This thesis estimates the effects of monetary policy shocks by employing vector auto regressions (VAR). I argue that to the extent the central bank and the private sector have information not reflected in the VAR, the measurement of policy innovations is contaminated. These incorrectly estimated policy shocks then generate misleading results about the effects of monetary policy. This thesis first attempts to figure out the variables indeed observed by central banks to make monetary policy decisions and then formulates the monetary policy reaction function by using those variables. Having identified more realistic monetary policy functions in VAR models, I conclude that most of the previous puzzling results about the effect of monetary policy shocks might be due to incorrectly identifying the monetary policy reaction function. / Thesis (Ph.D, Economics) -- Queen's University, 2009-06-15 15:59:13.04

Why do politicians change the legislation governing the central bank to give this institution operational independence in the setting of monetary policy. This thesis examines the political debates over central bank independence in New Zealand, Canada, Australia and New Zealand during the 1980s and 1990s. These cases were selected due to the variation in their levels of central bank independence, while holding key institutional variables constant. Four hypotheses are suggested by the political economy literature to explain the timing of this legislative change: the need to signal creditworthiness to international financial markets, in response to lobbying by domestic interest groups opposed to inflation, in response to proposals from an epistemic community of monetary experts or based on the self-interest of politicians concerned with re-election. The case studies find that politicians delegate to the central bank when this reform has the consensus support of an epistemic community of monetary experts, and a key politician is willing to champion the legislation through parliament. This epistemic community has increased influence during periods of economic uncertainty, such as following a financial crisis. A key politician is motivated to support this reform due to ideological or electoral reasons. This reform was facilitated by political institutions characterised by few checks and balances that concentrated power in the hands of the executive and offered few obstacles to changing the central bank's statute. Central bank independence was rejected in the cases where the epistemic community did not hold a consensus on the need for reform, and politicians saw only electoral risks from changing the central bank's statute. This study finds that politicians retain room to manoeuvre despite the rise of financial globalisation.

No description available.

The essay investigates if one monetary policy goal could be sufficient to stabilize both inflation and real economic fluctuations. The results indicate that one policy goal could be sufficient, nonetheless when empirically comparing Sweden and Canada’s monetary policy and the market outcome in these markets.

No description available.

This study is concerned with the structure, development and working of the monetary sector in the State of Kuwait. Initially, the characteristics of the Kuwaiti economy are examined in order to put the monetary sector into perspective. It is shown that the Kuwaiti economy possesses the general characteristics of less developed economies together with some distinguishing properties. It is argued that since there exists no one-to-one relationship between government revenue and expenditure, the money supply, in the short run, tends to be insulated from the effect of the external balance. - The working of Kuwait's monetary sector is studied through the balance sheets of the Central Bank and commercial banks, and that leads on to an analysis of the money supply process. The definition of money is discussed, and it is argued on the basis of empirical evidence that the broad money supply is the most appropriate for the purpose of monetary control. Causality testing reveals a unidirectional effect from money to income, and the estimation of velocity equations indicates that financing economic development by monetary injections is inflationary in the short run. A multiplier reduced-form model reveals the viability of short-run monetary control in Kuwait, but it is argued that monetary policy has been ineffective in this respect. It is also postulated that the combination of interest and exchange rate policies gives rise to the recurring problem of capital outflows. A structural econometric model of the monetary sector shows that the equilibrium stock of money is determined by supply and demand factors, and that the control of banks' reserves can (in part) accomplish the objective of monetary control. The model also reveals that both monetary and fiscal actions affect real output and prices, but the former tend to be more powerful. It is recommended on the basis of this study that the Central Bank should be given greater autonomy in formulating and executing monetary policy, and that its research capabilities need to be improved. Urgent attention must be paid to developing financial markets and upgrading tools of monetary policy. Finally, It Is argued that the Ministry of Finance should take part in the control of money and credit by manipulating its deposits and, perhaps, adopting a simple constant change rule in government expenditure.

No description available.

No description available.

No description available.