{"id":6379,"date":"2021-07-03T10:33:13","date_gmt":"2021-07-03T02:33:13","guid":{"rendered":"https:\/\/www.ukm.my\/jem\/?post_type=article&#038;p=6379"},"modified":"2022-07-27T07:02:57","modified_gmt":"2022-07-26T23:02:57","slug":"heterogeneity-effect-of-central-bank-independence-on-asset-prices-evidence-from-selected-developing-countries","status":"publish","type":"article","link":"https:\/\/www.ukm.my\/jem\/article\/heterogeneity-effect-of-central-bank-independence-on-asset-prices-evidence-from-selected-developing-countries\/","title":{"rendered":"Heterogeneity Effect of Central Bank Independence on Asset Prices: Evidence from Selected Developing Countries"},"content":{"rendered":"<p><em>The <\/em><em>study analyzes the response to <\/em><em>financial asset prices and economic activity concerning central bank independence<\/em><em> (CBI)<\/em><em> shocks in <\/em><em>selected <\/em><em>developing countries. The results shows that central bank independence reduces bond yield and increases stock price in the first two quarters. Financial asset prices were divided into the exchange rate, bond yield, and stock price, while the analysis was contingent on a panel Vector Autoregressive estimation. Furthermore, this study identifies heterogeneity across the countries in its sample through p<\/em><em>o<\/em><em>o<\/em><em>l<\/em><em>ability tests. This<\/em><em> is <\/em><em>achieved through a mean-group estimation to the panel Vector Autoregressive by averaging the PVAR coefficients and impulse response function for all individual countries<\/em><em>.<\/em> <em>Additionally, <\/em><em>the <\/em><em>sample countries<\/em><em> are divided<\/em><em> into two sub-groups. The results showed that central bank independence reduces bond yield and increases stock price in the first two quarters. However, it takes a year to cause an appreciation in the exchange rate. Moreover, financial asset prices have an essential role in monetary policy transmission<\/em><em> to the extent that a<\/em><em> change<\/em><em> in CBI<\/em><em> affects the exchange rate, bond yield, stock price,<\/em><em> thereby influencing<\/em><em> private consumption and investment.<\/em><\/p>\n","protected":false},"template":"","tags":[1265,1264,602,1266,309],"jel-code":[1267,1268,1269],"article-type":[1329],"class_list":["entry","author-asriwn","post-6379","article","type-article","status-publish","tag-bond-yield","tag-central-bank-independence","tag-exchange-rate","tag-panel-var","tag-stock-price","jel-code-e31","jel-code-e58","jel-code-e61","article-type-normal-article"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Heterogeneity Effect of Central Bank Independence on Asset Prices: Evidence from Selected Developing Countries | Jurnal Ekonomi Malaysia<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ukm.my\/jem\/article\/heterogeneity-effect-of-central-bank-independence-on-asset-prices-evidence-from-selected-developing-countries\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Heterogeneity Effect of Central Bank Independence on Asset Prices: Evidence from Selected Developing Countries | Jurnal Ekonomi Malaysia\" \/>\n<meta property=\"og:description\" content=\"The study analyzes the response to financial asset prices and economic activity concerning central bank independence (CBI) shocks in selected developing countries. The results shows that central bank independence reduces bond yield and increases stock price in the first two quarters. Financial asset prices were divided into the exchange rate,Continue Reading\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.ukm.my\/jem\/article\/heterogeneity-effect-of-central-bank-independence-on-asset-prices-evidence-from-selected-developing-countries\/\" \/>\n<meta property=\"og:site_name\" content=\"Jurnal Ekonomi Malaysia\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Jurnal-Ekonomi-Malaysia-JEM-104142808087485\" \/>\n<meta property=\"article:modified_time\" content=\"2022-07-26T23:02:57+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@EkonomiJurnal\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" 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