The monetary policy impact on agricultural growth and food prices

Agricultural growth is closely associated with sustainable economic development. This especially true from the perspective of developing countries, such as Indonesia and Pakistan, where significant portions labour force are dependent on agriculture for their livelihood. paper aims to examine effects macroeconomic policy (i.e. monetary policy) employment, food inflation, agricultural by analysing what extent effective in controlling price effect contractionary sector’s employment productivity, transmission money market rates 10-year interest rates. We employed a factor-augmented vector autoregressive model proposed Bernanke et al. (2005) data 1995 1996 2016 respectively. Main findings study demonstrate that tight significantly reduced inflation production while increasing rural unemployment rate. Short-term increased owing policies pursued both countries. An inclusive whereby policymakers work alongside governments achieve stabilisation reasonable recommended.