Differential Impact Of Monetary Policy: A Sectoral Analysis Of Pakistan
Author: Sundas Iftikhar

This study aims is to examine the differential impact of monetary policy on sectoral output. Therefore, the study has employed Structural Vector Autoregressive (SVAR) model with the recursive restrictions approach on eleven variables from the period 1973 to 2017 to meet its objective and capture the shock effect. Moreover, the study also conducted sub sample analysis from 1990 to 2017 to capture the impact of financial sector reforms. The impulse response function (IRF) estimates the response of sectoral output to the interest rate of monetary policy. However, the variance decomposition (VD) reveals the major variation in sectoral output is explained by interest rate. The empirical findings show that the interest rate of monetary policy has significant effects on output of mining and quarrying, manufacturing, electricity & gas distribution, and services sectors and these sectors are more responsive to the interest rate shocks. While agriculture, construction and transport, storage & communication sectors are insensitive to the interest rate shock. Supervisor:- Dr. Hassan Muhammad Mohsin

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Keywords : MONETARY POLICY, Pakistan, Sectoral Output, SVAR, VAR
Supervisor: Hassan Muhammad Mohsin

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