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The Impact of Institutional Quality on Monetary Policy in Pakistan
Kifayat Ullah, Abdul Wajid, Fazal Ali Khan
Volume 16 Issue 3
Global Journal of Management and Business
Volume 16 Issue 3
Global Journal of Management and Business
This study seeks to examine whether the monetary management in Pakistan is conducted under the framework advocated by the Taylor rule. We investigate this question after modifying the Taylor rule to control for the influence of institutional quality on monetary policy. Even after controlling for institutional quality, we find no evidence that the central bank makes use of the Taylor framework in devising monetary policy. Our results also suggest that by and large the focus of the monetary policy has been on containing inflation.
