How Does Monetary Policy Affect Economic Vulnerability to Oil Price Shock as against US Economy Shock?

Fatemeh Razmi; Azali Mohamed; Lee Chin; Muzafar Shah Habibullah

How Does Monetary Policy Affect Economic Vulnerability to Oil Price Shock as against US Economy Shock?

Year 2017, Volume: 7 Issue: 2, 544 - 550, 01.06.2017

Fatemeh Razmi Azali Mohamed Lee Chin Muzafar Shah Habibullah

Abstract

This paper investigates the role of the monetary policy in protecting the economy against the external shocks of US output and oil price during the 2007-2009 financial crisis. It also considers economic vulnerability caused by these external shocks after the crisis abated. The application of the structural vector auto regression (SVAR) model using monthly data from 2002:M1 to 2013:M4 for Indonesia, Malaysia, and Thailand shows that poor influence of monetary policies on monetary policy transmission channels (namely, interest rate, exchange rate, domestic credit, and stock price) in the pre-crisis period could not shield these economies from shocks of oil price and US output. The results of post-crisis period indicate a significant increase in the positive impact of monetary policy on channels of monetary transmission channels compared to the pre-crisis period. However, these economies continue to remain vulnerable to oil price shocks.

Keywords

monetary transmission, global financial crisis, monetary policy, domestic credit, stock price, exchange rate, interest rate, oil price shock, US economy

Year 2017, Volume: 7 Issue: 2, 544 - 550, 01.06.2017

Fatemeh Razmi Azali Mohamed Lee Chin Muzafar Shah Habibullah

Abstract

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Details

Other ID	JA68VG39MA
Journal Section	Research Article
Authors	Fatemeh Razmi This is me Azali Mohamed This is me Lee Chin This is me Muzafar Shah Habibullah This is me
Publication Date	June 1, 2017
Published in Issue	Year 2017 Volume: 7 Issue: 2

Cite

APA	Razmi, F., Mohamed, A., Chin, L., Habibullah, M. S. (2017). How Does Monetary Policy Affect Economic Vulnerability to Oil Price Shock as against US Economy Shock?. International Journal of Economics and Financial Issues, 7(2), 544-550.
AMA	Razmi F, Mohamed A, Chin L, Habibullah MS. How Does Monetary Policy Affect Economic Vulnerability to Oil Price Shock as against US Economy Shock?. IJEFI. June 2017;7(2):544-550.
Chicago	Razmi, Fatemeh, Azali Mohamed, Lee Chin, and Muzafar Shah Habibullah. “How Does Monetary Policy Affect Economic Vulnerability to Oil Price Shock As Against US Economy Shock?”. International Journal of Economics and Financial Issues 7, no. 2 (June 2017): 544-50.
EndNote	Razmi F, Mohamed A, Chin L, Habibullah MS (June 1, 2017) How Does Monetary Policy Affect Economic Vulnerability to Oil Price Shock as against US Economy Shock?. International Journal of Economics and Financial Issues 7 2 544–550.
IEEE	F. Razmi, A. Mohamed, L. Chin, and M. S. Habibullah, “How Does Monetary Policy Affect Economic Vulnerability to Oil Price Shock as against US Economy Shock?”, IJEFI, vol. 7, no. 2, pp. 544–550, 2017.
ISNAD	Razmi, Fatemeh et al. “How Does Monetary Policy Affect Economic Vulnerability to Oil Price Shock As Against US Economy Shock?”. International Journal of Economics and Financial Issues 7/2 (June 2017), 544-550.
JAMA	Razmi F, Mohamed A, Chin L, Habibullah MS. How Does Monetary Policy Affect Economic Vulnerability to Oil Price Shock as against US Economy Shock?. IJEFI. 2017;7:544–550.
MLA	Razmi, Fatemeh et al. “How Does Monetary Policy Affect Economic Vulnerability to Oil Price Shock As Against US Economy Shock?”. International Journal of Economics and Financial Issues, vol. 7, no. 2, 2017, pp. 544-50.
Vancouver	Razmi F, Mohamed A, Chin L, Habibullah MS. How Does Monetary Policy Affect Economic Vulnerability to Oil Price Shock as against US Economy Shock?. IJEFI. 2017;7(2):544-50.