Aydan Gismat Hajiyeva. (2022). The role of the monetary policy in the correlation between the banking sector and the economy. Bank and Policy, 2(2), 79–85. DOI: 

PDF Download

Abstract
Article examines the casual relationship between the effectiveness of monetary policy and financial inclusion in developed and underdeveloped countries. Structural Vector Auto-regression methods have been used to investigate the relationship between monetary policy effectiveness and financial inclusion. A causal relationship between financial inclusion and the effectiveness of monetary policy in developed countries. Thus, effective monetary policy increases financial inclusion in the country, and higher financial inclusion lowers inflation and makes monetary policy more effective. In less developed countries, a causal link can be observed from the effectiveness of monetary policy to financial inclusion. The use of the Structural Vector autoregressive technique and the three-dimensional financial inclusion index to examine the relationship between monetary policy effectiveness and financial inclusion in developed and developing countries is an important contribution to the study.
Keywords: bank, economy, monetary policy, inflation, liquidity

References

1.    Anarfo E.B., et al., Monetary policy and financial inclusion in sub-Sahara Africa: a panel VAR approach. Journal of African Business, 2019. 20(4): p. 549–572.
2.    Evans O., The effectiveness of monetary policy in Africa: modeling the impact of financial inclusion. Iranian Economic Review, 2016. 20(3): p. 327–337.
3.    Jianhua Gang & Zongxin Qian (2015) China’s Monetary Policy and Systemic Risk, Emerging Markets Finance and Trade, 51:4, 701-713, DOI: 10.1080/1540496X.2015.1039895
4.    Khan, H., Financial inclusion and financial stability: are they two sides of the same coin. Address by Shri HR Khan, Deputy Governor of the Reserve Bank of India, at BANCON, 2011.
5.    Lapukeni A.F., The impact of financial inclusion on monetary policy effectiveness: the case of Malawi. International Journal of Monetary Economics and Finance, 2015. 8(4): p. 360–384.
6.    Lenka S.K. and Bairwa A.K., Does financial inclusion affect monetary policy in SAARC countries? Cogent Economics & Finance, 2016. 4(1): p. 1127011.
7.    Ma Y. and Lin X., Financial development and the effectiveness of monetary policy. Journal of banking & Finance, 2016. 68: p. 1–11.
8.    Mbutor M.O. and Uba I.A., The impact of financial inclusion on monetary policy in Nigeria. Journal of Economics and International Finance, 2013. 5(8): p. 318–326.
9.    Mehrotra, A.N. and J. Yetman, Financial inclusion and optimal monetary policy. 2014.
10.    Mishkin F.S., Symposium on the monetary transmission mechanism. Journal of Economic perspectives, 1995. 9(4): p. 3–10.
11.    Mishkin, F.S., The economics of money, banking, and financial markets. 2007: Pearson education.
12.    Publications, W.B., The World Bank annual report 2013. 2013: World Bank Publications.
13.    Rudra Sensarma & Indranil Bhattacharyya (2016) Measuring monetary policy and its impact on the bond market of an emerging economy, Macroeconomics and Finance in Emerging Market Economies, 9:2, 109-130, DOI: 10.1080/17520843.2015.1123743
14.    Vladimir Teles & Joaquim Andrade (2008) Monetary policy and country risk, Applied  Economics, 40:15, 2021, 2028,  DOI: 10.1080/00036840-600949249