By using the Granger causality analyses
Very limited evidence was found for the deposits
Alwani also investigated the various channels of monetary mechanism in Malaysia
Found that the interest rate works most indirectly
Asset price
Important during the periods of high financial market volatility
Most of them have analysed the mechanism with an asymmetric viewpoint
Monetary regimes
By using an error correction model
The results showed that the majority of retail lending rates pass through is less than complete
Also Varies across retail interest rates
The main criticism of the error correction model is that it does not incorporate any GARCH elements to take into account the heteroskedasticity problems in the cointegrating errors
Asymmetric threshold cointegraation test
Deposit rate