Testing Monetary Policy Trilemma for Middle Eastern Economies Under a Bayesian Panel VAR Specification

Purpose: This research aims to investigate the presence of monetary policy trilemma in Middle Eastern region and evaluate spillover effects US on region. Theoretical framework: economies follow dollar pegged exchange rate with open capital account this poses a question about autonomy stance adopted by regional central banks. In context, current considers variables such as domestic interbank interest rate, liquidity, oil price federal fund test Design/methodology/approach: To region, employs time - varying Bayesian panel vector autoregression approach selects five countries which include Saudi Arabia, United Arab Emirates, Qatar, Oman Kuwait while considering monthly data for sample period 2009m10 until 2021m12. Findings: finds that positive shock increases rates economies. addition, negative relationship between shocks rates. Whereas induces reduction price. Research, Practical & Social implications: Current provides insights makers determine achieve its broader macroeconomic objectives. . Originality/value:This is unique it examines control variable system under specification.