Sime, Zerayehu (PhD)Manedo, Mengesha2018-11-142023-11-042018-11-142023-11-042016-06http://etd.aau.edu.et/handle/123456789/14180This study examines the impacts of Monterey policy on output and price in Ethiopia by employing VECM Co-integration VAR model. There are different test were used in this studies before the analysis and domestic credit used as the proxy for monetary policy in Ethiopia and the main findings of the study are: gross domestic product, net foreign asset, Treasury bill yield rates and reserve money are all significantly and positively related to the domestic credit in the long run in Ethiopia. Consumer price index affects negatively and significantly to domestic credit in Ethiopia. The other two variables oil price and real effective exchange rates are not significant in the long run. None of the variables are significant in the short run and the speed of adjustment towards long run equilibrium takes many years to make a full adjustment for the shocks in the system. Since money and capital markets are still at rudimentary stages with very few securities and given the lack of short-term money markets, interest rate policies are almost unused in the conduct of monetary policy in Ethiopia. It is, therefore, recommended that monetary authorities target monetary aggregate as a policy variable for effective monetary policy implementation. In addition, Monetary authorities should be put much effort to move towards more market based monetary and financial sector policies. In addition to the broad money and it also important to include other monetary aggregates that it may capture the monetary phenomenon of the country.enPolicy on Output and Price in EthiopiaThesis