Monetary targeting and controllability of money supply : an empirical assessment for Sri Lanka

Hennadige, Wasanthi Thenuwara. (2009). Monetary targeting and controllability of money supply : an empirical assessment for Sri Lanka Master's Thesis, School of Economics, The University of Queensland.

       
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Author Hennadige, Wasanthi Thenuwara.
Thesis Title Monetary targeting and controllability of money supply : an empirical assessment for Sri Lanka
School, Centre or Institute School of Economics
Institution The University of Queensland
Publication date 2009-01-01
Thesis type Master's Thesis
Total pages 100
Language eng
Subjects 14 Economics
Formatted abstract
Assessing the degree of controllability of money supply IS an important issue when monetary aggregates are the target of monetary policy. This study is an empirical investigation of the question "to what degree do central banks have controllability over money supply?" in the particular case of Sri Lanka. The question is addressed using two different approaches. The first is the conventional money multiplier approach and the second is the post-Keynesian contention that the money supply is endogenously determined. In conventional money supply approach, the controllability of money supply is assured if the money multiplier is sufficiently stable and monetary base is exogenous. The endogenous money hypothesis emphasizes the ability of financial system as a whole to generate monetary liabilities apart from the central bank's monetary stance. Thus the core of the endogeneity hypothesis that bank credit cause broad money is tested. The findings indicate instability in the broad money multiplier, with the endogenous money hypothesis shedding light on why it is unstable.
Keyword Monetary policy -- Sri Lanka.

Document type: Thesis
Collection: UQ Theses (non-RHD) - UQ staff and students only
 
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Created: Tue, 30 Nov 2010, 20:49:20 EST by Muhammad Noman Ali on behalf of The University of Queensland Library