Q&A: Seven Questions on Estimating the Monetary Transmission Mechanism in Low-Income Countries

Author:Bin Grace Li - Christopher Adam - Andrew Berg

The use of conventional vector auto-regression (VAR)-based methods to identify the monetary transmission mechanism (MTM) in low income countries suggests the MTM may be weaker and less reliable than in advanced and emerging market economies. But are structural VARs identified via short-run restrictions fit for this purpose? Are they capable of detecting a transmission mechanism when one exists,... (see full summary)

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