July 1, 2006 Thesis Open Access

ZERAYEHU SIME

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  <dc:creator>ZERAYEHU SIME</dc:creator>
  <dc:date>2006-07-01</dc:date>
  <dc:description>This paper presents a model of monetary policy in Ethiopia after financial liberalization policy adopted. It is
designed to identify both the goals and pattern of policy with the two major aims: firstly to know the way
how National Bank of Ethiopia systematically responds to macroeconomic shocks and secondly to evaluate
the performance monetary policy against its initial objective including assessment of gap analyses in
monetary policy frame work.
Hence, the model demonstrates that the National Bank of Ethiopia chooses the domestic credit as the most
appropriates indicator of monetary policy with the determinants of net foreign assets, consumer price index,
fiscal gap, real effective exchange rate and Gross Domestic Products to formulate the reaction function. On
top of this the empirical results explain that domestic credit has strong long run &amp; positive relation with net
foreign assets &amp; to real Gross Domestic Product. But it has short run relation with consumer price index,
real effective exchange rate and real Gross Domestic Product at different lag structure. The NBE followed a
combination of both accommodating and stabilization monetary policy. The Coefficients of equilibrating
error terms, ECM suggest that the speed of adjustment/ feed back effect towards the long run equilibrium
takes many years for full adjustment when there is a shock in the system, indicating the longer lags structure
and undeveloped financial sectors resulted in obstacles for the effectiveness of monetary policy</dc:description>
  <dc:identifier>https://zenodo.org/record/2936</dc:identifier>
  <dc:identifier>10.20372/nadre:2936</dc:identifier>
  <dc:identifier>oai:zenodo.org:2936</dc:identifier>
  <dc:relation>doi:10.20372/nadre:2935</dc:relation>
  <dc:relation>url:https://nadre.ethernet.edu.et/communities/aau</dc:relation>
  <dc:relation>url:https://nadre.ethernet.edu.et/communities/zenodo</dc:relation>
  <dc:rights>info:eu-repo/semantics/openAccess</dc:rights>
  <dc:rights>http://www.opendefinition.org/licenses/cc-by</dc:rights>
  <dc:title>HOW CENTRAL BANK RESPONDS TO MACROECONOMIC SHOCKS? SPECIFICATION, ESTIMATION AND ANALYSIS OF MONETARY POLICY REACTION FUNCTION: THE CASE OF ETHIOPIA (1991-2005)</dc:title>
  <dc:type>info:eu-repo/semantics/doctoralThesis</dc:type>
  <dc:type>publication-thesis</dc:type>
</oai_dc:dc>