Effectiveness of monetary policies in OECD countries

Abstract

In this study, it was analysed whether monetary policies have an effect on stock price index in 13 OECD countries (Australia, Canada, Denmark, Iceland, Japan, Korea, New Zealand, Norway, Poland, Sweden, Switzerland, the United Kingdom and the United States) with High Income Level for the period after 2008 financial crisis (2010-2013). In the analysis results, it was determined that there is a unidirectional relationship from short term interest rates and M1 money supply towards stock price indexes; and a unidirectional relationship from stock price index towards interbank interest rates and M3 money supply. In this respect, it was concluded that effectiveness of monetary policies in 13 OECD countries with high-income level are weak after 2008 financial crisis.

Keywords

• stock price index
• short term interest rates
• interbank interest rates
• m1 money supply
• m3 money supply
• dynamic panel data models