Contributions

  • Floerkemeier, Holger. - Contributor
  • International Monetary Fund. Middle East and Central Asia Dept. - Contributor

Publication

2006 - International Monetary Fund, Middle East and Central Asia Dept., Washington, D.C., District of Columbia

Language

English

Word Count

6,750 words, Guess

Page Count

27 pages

Identifiers

Description

This paper examines monetary policy transmission in Armenia in light of the authorities' intention to shift to an inflation-targeting regime over the medium term. We find that the capability of monetary policy to influence economic activity and inflation is still limited, as important channels of monetary transmission are not fully functional. In particular, the interest rate channel remains weak, even though there is some evidence of transmission to prices of changes in the repo rate, the central bank's new operating target for inflation. As in other emerging and transition economies with a high degree of dollarization, the exchange rate channel has a strong impact on the inflation rate. Moreover, we find that inflation does respond to broad money shocks, once foreign currency deposits are included.

Subjects

Topics

Economic policyEconometric modelsEconomic conditionsAnti-inflationary policiesTransmission mechanism (Monetary policy)Transmission mechanism (Monetary policy) -- Armenia (Republic)Armenia (Republic) -- Economic policy -- 1991- -- Econometric models

Times

Series Statement

  • IMF working paper -- WP/06/248

Links

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