Monetary Policy in Transition: The Case of Mongolia

20 Pages Posted: 30 Jan 2006

Date Written: February 2000


This paper analyzes monetary policy in transition. It examines the dynamics of monetary policy in Mongolia using granger-causality tests for monetary variables and inflation. The paper also analyzes money demand using data from 22 Mongolian regions during 1993-1998. The analyses confirm the key role of monetary policy in stabilization and reveal that even in a transition economy as rudimentary as Mongolia, a stable money demand and a predictable relationship between inflation and monetary variables do exist. Hence market-based monetary policy is effective. In addition, the analysis points to a difference between transition and industrial economies in the elasticity of money demand with respect to activity, reflecting the larger role for transactions demand for money.

Keywords: Money demand, Transition economies

JEL Classification: E31, E41, O53, P24

Suggested Citation

Sløk, Torsten Mikkel, Monetary Policy in Transition: The Case of Mongolia (February 2000). IMF Working Paper No. 00/21, Available at SSRN:

Torsten Mikkel Sløk (Contact Author)

Deutsche Bank, New York ( email )

60 Wall Street
Mail Stop: NYC60-1815
New York, NY 10005
United States

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