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The study aims to estimate the short- and long-run effects of monetary policy on residential property prices in South Africa. Over the past decades, there has been a monetary policy shift, from targeting money supply and exchange rate to inflation. The shifts have affected residential property market dynamics.

The Johansen cointegration approach was used to estimate the effects of changes in monetary policy proxies on residential property prices using quarterly data from 1980 to 2022.

Mortgage finance and economic growth have a significant positive long-run effect on residential property prices. The consumer price index, the inflation targeting framework, interest rates and exchange rates have a significant negative long-run effect on residential property prices. The Granger causality test has depicted that exchange rate significantly influences residential property prices in the short run, and interest rates, inflation targeting framework, gross domestic product, money supply consumer price index and exchange rate can quickly return to equilibrium when they are in disequilibrium.

There are limited arguments whether the inflation targeting monetary policy framework in South Africa has prevented residential property market boom and bust scenarios. The study has found that the implementation of inflation targeting framework has successfully reduced booms in residential property prices in South Africa.

This paper aims to accommodate the influence of both economic policy uncertainty and geopolitical risks in the relationship between oil price and exchange-rate returns in the Brazil, Russia, India, China and South Africa (BRICS) countries through an interaction term (EPGR).

The authors use continuous wavelet transform (CWT), wavelet coherence (WC) and partial wavelet coherence (PWC). First, the authors apply the CWT to examine the evolution of oil prices, EPGR and exchange rate returns. Second, the authors use WC to investigate the relationship between oil price and exchange rate returns (excluding EPGR). Third, the authors use PWC to account for EPGR’s impact on the oil exchange rate returns dynamics and explore partial correlations in the oil and exchange rate returns dynamics.

The empirical results generally show that EPGR is a key driver in the oil and exchange rate returns nexus.

The relevance of EPGR in influencing exchange rate volatility is confirmed by the findings. As a result, it is critical for government officials and foreign exchange investors to use EPGR as a leading indicator when establishing foreign exchange trading strategies and economic forecasts.

This study is the first, to the best of the authors’ knowledge, to apply a wavelet-based technique to account for EPGR in the relationship between oil and exchange rate returns in the BRICS countries.

Czechia's economic growth is substantially dependent on foreign trade. An independent monetary policy in a managed floating exchange rate regime gives a unique perspective on the effects of the exchange rate on foreign trade. This chapter evaluates the effects of exchange rate development on different sectors of Czechia's foreign trade. Using disaggregated data based on trading partner and product category, the period from 1999 to 2020 is analyzed. Czechia's 10 major trading partners are included in the estimation. The relationship between exchange rates and foreign trade is assessed through a Johansen cointegration approach and modified vector error correction model. The results of the Johansen cointegration test indicate that the majority of the aggregate bilateral trade balances are in a long-term relationship with Czechia's gross domestic product (GDP), foreign GDP and exchange rate movements. The J-curve is proved only in chemicals and related products traded with France, manufactured goods traded with Italy and Slovakia and mineral fuels and lubricants traded with the Netherlands.

Despite being a flexible tool that can address several macroeconomic issues, Dynamic Stochastic General Equilibrium (DSGE) models have been rarely used to analyse the interaction between monetary and fiscal policy until the post-financial crisis, leaving a gap in the analysis of how government consumption affects the transmission mechanism of monetary policy. This motivates this paper to analyse how government consumption affects the dynamics of a small open economy, once the former is included in a non-separable form to the utility function. To the best of the authors' knowledge, this issue has not been addressed by the literature, and the authors aim to do so in this paper.

A standard New Keynesian model for a small open economy is used to allow for the presence of non-separable government consumption in the utility function. The model is supported by panel regressions.

The inclusion of Government consumption dampens the transmission mechanism of monetary policy. The degree of openness dampens the crowding out effect of fiscal policy to monetary policy, as the exchange rate channel empowers it. Empirical estimates for 35 OECD countries support the theoretical findings of the model.

The effect of government consumption on the transmission mechanism of MP has not been addressed in the literature. This paper contributes to the literature by addressing this issue.

• • The inclusion of Government consumption dampens the transmission mechanism of monetary policy.

• • The degree of openness alleviates the crowding out effect of fiscal policy to monetary policy, as the exchange rate channel empowers it.

• • Empirical estimates for 35 OECD countries support the theoretical findings of the model.

• The inclusion of Government consumption dampens the transmission mechanism of monetary policy.

• The degree of openness alleviates the crowding out effect of fiscal policy to monetary policy, as the exchange rate channel empowers it.

• Empirical estimates for 35 OECD countries support the theoretical findings of the model.

Over the last few years, the European Central Bank (ECB) has adopted unconventional monetary policies. These measures aim to boost economic growth and increase inflation through the bond market. The purpose of this paper is to study the impact of the ECB’s quantitative easing (QE) on the investor’s behavior in the stock market.

First, the authors theoretically identify the transmission channels of the QE shocks to the stock market. Then, the authors empirically assess the financial market’s responses to QE shocks in a data-rich environment using a factor augmented VAR (FAVAR).

The results show that the ECB’s unconventional monetary policy positively affects the stock market. A QE shock leads to an increase in stock prices and a drop in the realized volatility and the implied risk premium. The authors also suggest that the ECB’s QE is transmitted to the stock market through five main channels: the liquidity, the expectation, the portfolio reallocation, the interest rates and the risk premium channels.

The findings help to better understand the behavior of stock market assets in a data-rich economic context and guide investors and policymakers in the presence of unconventional monetary tools. For instance, decision-makers and investors should consider the short-term effect of the QE interventions and the changing behavior of the financial actors over time. In addition, high stock market returns can increase risk appetite. This can lead investors to underestimate the market risk. Decision-makers and market participants should take into consideration the impact of the large injection of money through the QE, which may raise the risk of a speculative bubble in the financial market.

To the best of the authors’ knowledge, this is the first study that incorporates a theoretical and empirical analysis to explore QE transmission to the stock market in the European context. Unlike previous studies, the authors use the shadow rate proposed by Wu and Xia (2017) to quantify the effect of the ECB’s QE in a data-rich environment. The authors also include two key risk indicators – the stock market risk premium and the realized volatility – to capture investors’ behavior in the stock market following QE shocks.

The purpose of this study is to examine the effect of Islamic banks (IBs) and macroeconomic variables on economic growth in Saudi Arabia, the United Arab Emirates, Kuwait, Malaysia, Qatar, Bahrain and Bangladesh.

Based on these criteria, 672 observations from 24 IBs in Saudi Arabia, the United Arab Emirates, Kuwait, Malaysia, Qatar, Bahrain and Bangladesh were chosen for further investigation. Time series analysis is a well-known method for determining if model variables are stationary and how long-term relationships function through cointegration analysis. This study uses impulse response function (IRF) and variance decomposition (VD) methodologies to demonstrate how each macroeconomic variable shock influences the short-term dynamic path of all system variables.

Islamic banking promotes economic growth, especially in Saudi Arabia, the UAE, Kuwait, Malaysia, Qatar, Bahrain and Bangladesh. The findings of the Islamic banking VDC test have a direct and long-term effect on economic growth.

The literature on this topic can be improved in a number of ways, including by adopting a more robust method to analyze over a longer time frame. By researching specific financing in various areas of the economy, one can gain a deeper understanding of Islamic financing. This will enable the identification of sectors that contribute to economic expansion. Future research should examine combining nations with pure Islam and dual-banking systems to acquire sufficient data.

This paper has practice and research implications. It recommends adopting the nation’s successful experiment with the Islamic banking system as a model for attaining economic growth through Islamic financing. To replicate this successful experiment, government-based decision-makers and monetary policy experts must collaborate to make Islamic money flows simple and rapid through financial channels that enhance economic growth.

The study of the contribution of Islamic banking to economic growth in developing nations, particularly those with the highest total assets (TAs) and total deposits (TDs) in the world, remains of modest value. To the best of the authors’ knowledge, this is the first study to empirically assess the impact of IBs in developing nations, particularly those with the highest TAs and TDs in the world, on economic growth as measured by gross domestic product (GDP).

This study seeks to build a financial uncertainty index for Saudi Arabia. This index serves as a leading indicator of Saudi economic activity and helps to describe economic fluctuations and forecast economic trends.

This study adopts an extension of the Jurado et al. (2015) procedure by combining financial uncertainty factors with their net spillover effects on GDP and inflation to construct an aggregate financial uncertainty index. The authors consider 13 monthly financial variables for Saudi Arabia from January 2010 to June 2021.

The empirical results show that the constructed financial uncertainty estimates are good leading indicators of economic activity. The robustness analysis suggests that the authors’ proposed financial uncertainty estimators outperform the alternative estimates used by other existing approaches to estimate the financial conditions index.

To the best of the authors’ knowledge, this is the first attempt at constructing a financial uncertainty index for Saudi Arabia. This study extends the empirical literature, from which the authors propose a novel conceptual framework for building a financial uncertainty index by combining the approach of Jurado et al. (2015) and the time-varying connectedness network approach proposed by Antonakakis et al. (2020)

The aim of this chapter is to describe the purpose of the introduction of the exchange rate commitment by the Czech National Bank (CNB) in the period from November 2013 to April 2017 and its effects on the real economy. The main reason for introducing the exchange rate commitment was concern about the possibility of a prolonged deflationary period in Czechia. Given that the standard monetary policy instruments had already been exhausted on easing the monetary policy conditions, the CNB Bank Board opted for an exchange rate commitment. The secondary objective of the exchange rate commitment was to boost the economy through the positive effect of a weaker koruna on exports. Next, we focus in more detail on the effect of the exchange rate commitment in the economy and the course of the foreign exchange interventions. Overall, we can summarize that the CNB's foreign exchange interventions were an extraordinary monetary policy instrument – in a market economy with inflation targeting and a flexible exchange rate – used in extraordinary times.

The monetary policy implementation and corporate investment are closely intertwined. The aim of modern monetary policy is to mitigate economic fluctuations and stabilise economic growth. One of the ways of influencing the real economy is influencing the level of investment by enterprises.

This chapter provides evidence on how monetary policy affected corporate investment in Poland between 1Q 2000 and 3Q 2022. We investigate the impact of Polish monetary policy on investment outlays in contexts of high uncertainty.

Using the correlation analysis and the regression model, we show the relation between the monetary policy and the investment outlays of Polish enterprises. We used the least squares method as the most popular in linear model estimation. The evaluation includes model fit, independent variable significance and random component, i.e. constancy of variance, autocorrelation, alignment with normal distribution, along with Fisher–Snedecor test and Breusch–Pagan test.

We find that Polish enterprises are responsive to changes in monetary policy. Hence, the corporate investment level is correlated with the effects of monetary policy (especially with the decision on the central bank's basic interest rate changes). We found evidence that QE policy has a positive impact on Polish investment outlays. The corporate investment in Poland is positively affected by respective monetary policies through Narodowy Bank Polski (NBP) reference rate, inflation, corporate loans, weighted average interest rate on corporate loans.

This paper aims to enhance the Global Projection Model (GPM) developed by the International Monetary Fund by constructing a GPM4 model that includes the United States of America, the Eurozone, Japan and China.

This article introduces the United States of America, the Eurozone, Japan and China into a comprehensive global forecasting model, analyzing the impact of liquidity management in G3 economies on nine key macroeconomic variables in China.

The findings reveal that the liquidity management strategies employed by major economies do exert a certain influence on China's major macroeconomic variables. Different types of liquidity shocks elicit varying effects. Monetary shocks exhibit the strongest instantaneous impact, while credit conditions and policy rate shocks contribute more significantly to China's long-term macroeconomic fluctuations. However, no single shock stands out as the dominant factor.

This paper attempts to expand the GPM model developed by the International Monetary Fund and build a GPM4 model including China, the United States of America, the Eurozone and Japan. For the first time, the GPM model was used to analyze the spillover effects of liquidity management in major economies on China's macroeconomy and revealed the impact of non-price factors such as credit conditions on China's macroeconomic variables.