This study estimates the impact of monetary policy on lending and deposit rates in Pakistan, using bank data for the period November 2001 to March 2011. We find evidence of a long-run relationship between the lending and discount rate, but the deposit rate is not co-integrated, and the...

This paper explores the past 50 years of data on inflation, growth rates of money and real GDP. It is found that inflation is primarily a monetary phenomena; however, the quantity theory of money does not hold in Pakistan below money supply growth rates of 9 percent. A simple monetary rule is...

As a result of policy inaction in addressing structural issues over a protracted period and a wrong set of economic priorities followed over the past several years, Pakistan’s economy faces a grave set of challenges. Among the many issues, which range fromhigh inflation to power deficits and...

This paper explores the past 50 years of data on inflation, growth rates of money and real GDP. It is found that inflation is primarily a monetary phenomena; however, the quantity theory of money does not hold in Pakistan below money supply growth rates of 9 percent. A simple monetary rule is...

The objective of this study is to estimate a monetary policy reaction function for Pakistan. To do this, we use data for the period 1992Q4–2010Q2. Our results show that the State Bank of Pakistan reacts to changes in the inflation rate and economic activity in a manner that is consistent with...

As a result of policy inaction in addressing structural issues over a protracted period and a wrong set of economic priorities followed over the past several years, Pakistan’s economy faces a grave set of challenges. Among the many issues, which range fromhigh inflation to power deficits and...