Monetary policy and financial stability: empirical evidence from South Mediterranean countries
Saoussen Ouhibi and Sami Hammami
Ouhibi, S. and Hammami, S. (2015). Monetary policy and financial stability: empirical evidence from South Mediterranean countries. Bulletin of Business and Economics, 4(4), 198-213
This article examines the relationship between monetary policy and financial stability, in the experience of six south Mediterranean countries (Tunisia, Morocco, Egypt, Lebanon, Jordan and Turkey) over the period 2006M1-2013M12. This research analyze the role of monetary policy to contribute to financial stability using a structural vector Auto-regressive model .our empirical results show that the effectiveness of short –term interest rates in affecting selected asset prices depends on the strategy of monetary policy . For countries that adopt a flexible exchange rate regime (Tunisia, Marocco, Egypt and Turkey), the interest rate is conducive to financial stability. But, countries that adopt a fixed exchange rate regime (Jordan and Lebanon), the interest rate is not an effective tool for promoting financial stability.
monetary policy, financial stability, Structural Vector Autoregressive model.
Research Foundation for Humanity (RFH)
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