The Impact of Institutional Quality on Monetary Policy in Pakistan

1
Kifayat Ullah
Kifayat Ullah
2
Abdul Wajid
Abdul Wajid
3
Fazal Ali Khan
Fazal Ali Khan
1 Karakoram International University Gilgit, Pakistan

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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.

Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

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Not applicable for this article.

Kifayat Ullah. 2016. \u201cThe Impact of Institutional Quality on Monetary Policy in Pakistan\u201d. Global Journal of Management and Business Research - A: Administration & Management GJMBR-A Volume 16 (GJMBR Volume 16 Issue A3): .

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GJMBR Volume 16 Issue A3
Pg. 43- 52
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Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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GJMBR-C Classification: JEL Code: E 310, E 320, E 340, E 580
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April 26, 2016

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English

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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.

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The Impact of Institutional Quality on Monetary Policy in Pakistan

Kifayat Ullah
Kifayat Ullah Karakoram International University Gilgit, Pakistan
Abdul Wajid
Abdul Wajid
Fazal Ali Khan
Fazal Ali Khan

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