This paper assesses the importance role of two monetary transmission mechanism channels in managing inflation and contributing to economic growth, by employing Structural Vector Autoregression (SVAR) model. The monetary transmission channels are interest rate channel and credit-bank lending channel. The model is then solved by implementing forecasting error variance decomposition to investigate the contribution of each variables to both inflation and economic growth. It is shown that interest rate channel plays important role in monetary transmission mechanism for maintaining inflation but has limited role in the economic growth. In the other hand, credit-bank lending channel can effectively affect economic growth
Penelitian
Do Credit Channel and Interest Rate Channel Play Important Role in Monetary Transmission Mechanism in Indonesia? : A Structural Vector Autoregression Model
Abstrak
Keyword
: monetary transmission mechanism; interest rate channel; bank lending channel; Structural VAR
Sitasi
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