Hidden Bibliographic Details
| Other authors / contributors: | International Monetary Fund. Asia and Pacific Department.
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| ISBN: | 1513549138
9781513549132
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| ISSN: | 1018-5941
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| Notes: | "November 2015."
"Asia and Pacific Department."
Includes bibliographical references (page 24).
Online resource; title from pdf title page (IMF.org Web site, viewed November 10, 2015).
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| Summary: | This paper explores how monetary policy affects the real economy and its efficacy in promoting financial stability in a large low income country. This paper shows that monetary policy modestly impacts real economic activity and inflation via the bank lending and financial accelerator channels. Second, money market and treasury rates signal changes in the policy stance, while altering banks' intermediation cost curves due to shifting risk premia. At the same time, evidence points to monetary policy inducing an overshooting in asset prices. These findings suggest that financial stability could be undermined if the calibration of monetary policy is based solely on output and inflation without accounting for the stage of the financial cycle. Finally, the paper discusses policy measures that would enhance the transmission of monetary policy and promote financial stability in Bangladesh. --Abstract.
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| Standard no.: | 10.5089/9781513549132.001
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