E.  Effectiveness of monetary policy in Pakistan  Significance of various channels that transmit the monetary policy shocks in Pakistan to the real economy has been analyzed by few economists. Ahmad et al. (2005) found that credit channel is the most important conduit for transmitting monetary policy actions to the real economic activity.
Evidence confirms transmission through the active asset price channel and exchange rate channel. According to this study, monetary policy shocks impact real output after a lag of 7 to 11 months. Tasneem and Waheed (2006), on the other hand, investigated whether different sectors of the economy respond differently to monetary shocks.