Money and Banking Coursework

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Westminster International University in Tashkent

BSc in Economics with Finance - Level 5

2012 - 2013

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(Word Count: 3279)

To be completed by the student
|Student’s ID number |00001662 | |Module name |Money and Banking | |Module code |BUZE507 | |Tutor |Rustam Sulaymanov | |Individual assignment |( | |Group assignment |( | |Submission deadline |11 April 2013 - 17:00 | | | |For Academic Registrar use only | | | | | | | | | | | | | | |

CONTENTS

ABSTRACT3
INTRODUCTION3
MAIN PART4
PART A4
TRANSMISSION MECHANISM AND ITS SIGNIFICANCE4
VAR MODEL AND POLICY ISSUES6
PART B - TECHNICAL PART OF RESEARCH7
Data Source7
Data Description8
Model Description10
Results and Interpretation12
Forecasting17
PART C – EFFECTS OF MONETARY POLICY INSTRUMENTS19
CONCLUSION22
BIBLIOGRAPHY23
APPENDIX 126

ABSTRACT

The role of monetary policy instruments in preserving price stability and maintaining the overall economic well-being in any country is significant. A number of researches conducted so far have examined the positive effects of successful monetary policies implemented by Central Banks of different states. This research paper also focuses on examining the influence of monetary policy mechanisms implemented by Central Bank (i.e. Bank of Japan) on the economy of Japan between 2001-2010 by analyzing the changes in distinctive economic indicators, including Gross Domestic Product (GDP), Consumer Price Index (CPI), interest rates and money supply (M1). The role of transmission mechanisms and the consistency of VAR (Vector Auto Regression) model for analyzing policy issues will also be discussed. The paper concludes that well-constructed monetary policy and overall economic and financial stability are directly interrelated with each other.

INTRODUCTION

The main aim of this research paper is to analyze the effect of monetary policy conducted by Japanese central bank on the economy of Japan during the chosen 10-year (2006-2010) period. Particularly, how these...
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