Monetary Policy in Transition: The Case of Mongolia
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Summary:
This paper analyzes monetary policy in transition. It examines the dynamics of monetary policy in Mongolia using granger-causality tests for monetary variables and inflation. The paper also analyzes money demand using data from 22 Mongolian regions during 1993-1998. The analyses confirm the key role of monetary policy in stabilization and reveal that even in a transition economy as rudimentary as Mongolia, a stable money demand and a predictable relationship between inflation and monetary variables do exist. Hence market-based monetary policy is effective. In addition, the analysis points to a difference between transition and industrial economies in the elasticity of money demand with respect to activity, reflecting the larger role for transactions demand for money.
Series:
Working Paper No. 2000/021
Subject:
Demand for money Exchange rates Foreign exchange Inflation Monetary base Money National accounts Personal income Prices
English
Publication Date:
January 1, 2000
ISBN/ISSN:
9781451843903/1018-5941
Stock No:
WPIEA0212000
Pages:
19
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