Monetary Policy Transmission Mechanism of Bangladesh
Publication | December 2021
This paper examines the effectiveness of the monetary policy of the central bank of Bangladesh and the impacts on the country's economy.
Understanding the effects of monetary policy on the economy is crucial in the study of macroeconomics and in the practice of policy making. In the case of Bangladesh Bank, the paper shows that while traditional tools (i.e., reserve money and repo rate) do not perform as predicted, the national savings certificate affects the economy of Bangladesh as if it were a monetary policy tool—weakening the effectiveness of the monetary policy transmission mechanism.
- Key Variables and Data of Bangladesh Bank's Monetary Policy
- Model and Results
- Appendix: Alternative Choice of VAR Lag Order
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