Post Keynesian interest rate exogeneity: evidence from Malaysia / Sabri Nayan ... [et al.]
In an economy where money supply is endogenous, interest rate serves as the key instrument of monetary policy. The operation of monetary policy through the setting of a key interest rate and not through a money supply target is actually the fundamental tenet of Post Keynesian economics that money su...
| Main Authors: | , , , |
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| Format: | Conference or Workshop Item |
| Language: | English |
| Published: |
2014
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| Subjects: | |
| Online Access: | https://ir.uitm.edu.my/id/eprint/35629/ |
| _version_ | 1848808840939700224 |
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| author | Nayan, Sabri Kadir, Norsiah Yusof, Abdul Hafiz Mohamad Ali, Noor Azillah |
| author_facet | Nayan, Sabri Kadir, Norsiah Yusof, Abdul Hafiz Mohamad Ali, Noor Azillah |
| author_sort | Nayan, Sabri |
| building | UiTM Institutional Repository |
| collection | Online Access |
| description | In an economy where money supply is endogenous, interest rate serves as the key instrument of monetary policy. The operation of monetary policy through the setting of a key interest rate and not through a money supply target is actually the fundamental tenet of Post Keynesian economics that money supply is endogenous; that interest rate rather than the stock of money should be the focus of monetary policy. While the proposition of money endogeneity (or interest rate exogeneity) is generally accepted by all Post Keynesians, they disagree on one related question: to what extent are interest rates set exogenously by central banks? While this issue has become the focus of debate between the Horizontalists and Structuralists, the ability of a central bank to influence economic activity would depend much on the interaction between official rate and market rates. The major interest of the present paper is to examine this issue of interest rate transmission mechanism based on the Malaysian data. Employing the cointegration and vector error correction model procedures to analyze the data, results of the study indicate that the pass through from the overnight policy rate to two short term market rates is less than complete. |
| first_indexed | 2025-11-14T23:05:07Z |
| format | Conference or Workshop Item |
| id | uitm-35629 |
| institution | Universiti Teknologi MARA |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T23:05:07Z |
| publishDate | 2014 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | uitm-356292022-09-05T07:53:42Z https://ir.uitm.edu.my/id/eprint/35629/ Post Keynesian interest rate exogeneity: evidence from Malaysia / Sabri Nayan ... [et al.] Nayan, Sabri Kadir, Norsiah Yusof, Abdul Hafiz Mohamad Ali, Noor Azillah HB Economic Theory. Demography Economics Business cycles. Economic fluctuations. Economic indicators In an economy where money supply is endogenous, interest rate serves as the key instrument of monetary policy. The operation of monetary policy through the setting of a key interest rate and not through a money supply target is actually the fundamental tenet of Post Keynesian economics that money supply is endogenous; that interest rate rather than the stock of money should be the focus of monetary policy. While the proposition of money endogeneity (or interest rate exogeneity) is generally accepted by all Post Keynesians, they disagree on one related question: to what extent are interest rates set exogenously by central banks? While this issue has become the focus of debate between the Horizontalists and Structuralists, the ability of a central bank to influence economic activity would depend much on the interaction between official rate and market rates. The major interest of the present paper is to examine this issue of interest rate transmission mechanism based on the Malaysian data. Employing the cointegration and vector error correction model procedures to analyze the data, results of the study indicate that the pass through from the overnight policy rate to two short term market rates is less than complete. 2014-11 Conference or Workshop Item PeerReviewed text en https://ir.uitm.edu.my/id/eprint/35629/1/35629.pdf Nayan, Sabri and Kadir, Norsiah and Yusof, Abdul Hafiz and Mohamad Ali, Noor Azillah (2014) Post Keynesian interest rate exogeneity: evidence from Malaysia / Sabri Nayan ... [et al.]. (2014) In: TeSSHI 2014, 5-6 Nov 2014, One Hotel Helang, Langkawi Kedah Malaysia. |
| spellingShingle | HB Economic Theory. Demography Economics Business cycles. Economic fluctuations. Economic indicators Nayan, Sabri Kadir, Norsiah Yusof, Abdul Hafiz Mohamad Ali, Noor Azillah Post Keynesian interest rate exogeneity: evidence from Malaysia / Sabri Nayan ... [et al.] |
| title | Post Keynesian interest rate exogeneity: evidence from Malaysia / Sabri Nayan ... [et al.] |
| title_full | Post Keynesian interest rate exogeneity: evidence from Malaysia / Sabri Nayan ... [et al.] |
| title_fullStr | Post Keynesian interest rate exogeneity: evidence from Malaysia / Sabri Nayan ... [et al.] |
| title_full_unstemmed | Post Keynesian interest rate exogeneity: evidence from Malaysia / Sabri Nayan ... [et al.] |
| title_short | Post Keynesian interest rate exogeneity: evidence from Malaysia / Sabri Nayan ... [et al.] |
| title_sort | post keynesian interest rate exogeneity: evidence from malaysia / sabri nayan ... [et al.] |
| topic | HB Economic Theory. Demography Economics Business cycles. Economic fluctuations. Economic indicators |
| url | https://ir.uitm.edu.my/id/eprint/35629/ |