Investigating the effects of monetary policy on financial stability in 9 emerging economies of Asia
Alla Asgharzadeh
1
(
Economics-Money and Finance Ph.D Student, Faculty of Management and Accounting, Islamic Azad University, Qazvin Branch, Qazvin, Iran.
)
Farhad Rahbar
2
(
Professor of Department of Economics, Faculty of Economics, Tehran University, Tehran, Iran.
)
Mir-Hossein Mousavi
3
(
Associate Professor of Department of Economics, Faculty of Social and Economics, Alzahra University, Tehran, Iran.
)
Keywords: Monetary Policy, financial crisis, Financial stability, Asian Economy,
Abstract :
In recent decades, the emergence and spread of financial crises on the economies of many countries has shown its direct and indirect effects. Therefore, in order to deal with this crisis, it is necessary to adopt a systematic policy in all countries that have been directly or indirectly affected. Although these countries need to make financial adjustments to overcome the crisis, the severity of these adjustments depends on the specific economic conditions of the countries. In monetary policy, the central bank and financial systems play an important role in economic development. One example is the allocation of resources over time between different investments. The correct view of the financial system allows the economy to achieve a high level of growth, provided that other macroeconomic conditions are stable. This study, in the form of method innovation, has proposed an alternative method for measuring financial instability, which is based on factor analysis of various indicators.Accordingly,using statistical methods and econometric models, including the "dynamic panel model", the relationship between monetary policy and the index of financial instability in some emerging Asian countries during the period 2018-2007 has been evaluated. The results of this evaluation and pattern fit show a negative relationship between central bank monetary policy and financial instability.
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