Financial Crisis Us Unconventional Monetary Policy And International Spillovers

Author : Qianying Chen,Andrew Filardo,Mr.Dong He,Mr.Feng Zhu
Publisher : International Monetary Fund
Page : 32 pages
File Size : 49,6 Mb
Release : 2015-04-29
Category : Business & Economics
ISBN : 9781475520668

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Financial Crisis, US Unconventional Monetary Policy and International Spillovers by Qianying Chen,Andrew Filardo,Mr.Dong He,Mr.Feng Zhu Pdf

We study the impact of the US quantitative easing (QE) on both the emerging and advanced economies, estimating a global vector error-correction model (GVECM) and conducting counterfactual analyses. We focus on the effects of reductions in the US term and corporate spreads. First, US QE measures reducing the US corporate spread appear to be more important than lowering the US term spread. Second, US QE measures might have prevented episodes of prolonged recession and deflation in the advanced economies. Third, the estimated effects on the emerging economies have been diverse but often larger than those recorded in the US and other advanced economies. The heterogeneous effects from US QE measures indicate unevenly distributed benefits and costs.

Author : Mr.Jiaqian Chen,Mr.Tommaso Mancini Griffoli,Ms.Ratna Sahay
Publisher : International Monetary Fund
Page : 30 pages
File Size : 52,7 Mb
Release : 2014-12-24
Category : Business & Economics
ISBN : 9781498322454

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Spillovers from United States Monetary Policy on Emerging Markets by Mr.Jiaqian Chen,Mr.Tommaso Mancini Griffoli,Ms.Ratna Sahay Pdf

The impact of monetary policy in large advanced countries on emerging market economies—dubbed spillovers—is hotly debated in global and national policy circles. When the U.S. resorted to unconventional monetary policy, spillovers on asset prices and capital flows were significant, though remained smaller in countries with better fundamentals. This was not because monetary policy shocks changed (in size, sign or impact on stance). In fact, the traditional signaling channel of monetary policy continued to play the leading role in transmitting shocks, relative to other channels, affecting longer-term bond yields. Instead, we find that larger spillovers stem more from structural factors, such as the use of new instruments (asset purchases). We obtain these results by developing a new methodology to extract, separate, and interpret U.S. monetary policy shocks.

Author : International Monetary Fund. Strategy, Policy, & Review Department,International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 59 pages
File Size : 46,9 Mb
Release : 2013-03-09
Category : Business & Economics
ISBN : 9781498341349

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Global Impact and Challenges of Unconventional Monetary Policies - Background Paper by International Monetary Fund. Strategy, Policy, & Review Department,International Monetary Fund. Monetary and Capital Markets Department Pdf

This paper provides case studies of 13 of the largest non-UMP countries. The case studies begin with an overview of recent macro-economic developments as well as capital flow patterns during the crisis up to the first U.S. tapering announcement in May 2013. Country experiences with capital inflows are judged along five dimensions: (i) the size of capital inflows, (ii) policies used to manage inflows, (iii) external stability, measured by exchange rate overvaluation and current account deficits relative to fundamentals,2 (iv) asset price and credit market reactions, and (v) financial sector stability. Case studies mostly draw on published IMF Staff Reports for each country, as well as the 2013 Pilot External Stability Report (IMF 2013d).

Author : International Monetary Fund. Communications Department
Publisher : International Monetary Fund
Page : 30 pages
File Size : 48,8 Mb
Release : 2015-04-08
Category : Business & Economics
ISBN : 9781475547283

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Per Jacobsson Lecture by International Monetary Fund. Communications Department Pdf

As the Federal Reserve’s statutory objectives are defined as specific goals for the U.S. economy—to pursue maximum sustainable employment and price stability—and its policy decisions are targeted to achieve these dual objectives, there might seem to be little need for its policymakers to pay attention to developments outside the United States. But such an inference would be incorrect: the state of the U.S. economy is significantly affected by the state of the world economy, and of course, actions taken by the Federal Reserve influence economic conditions abroad, which in turn spill back on the evolution of the U.S. economy and therefore must be taken into account in the Federal Reserve’s monetary policy choices. This Per Jacobsson Lecture first reviews the effect of the Federal Reserve’s monetary policies on the rest of the global economy, particularly emerging market economies. It then addresses prospective outcomes and possible risks associated with the normalization of the Federal Reserve’s policies. Finally, it discusses the Federal Reserve’s responsibilities in the world economy.

Author : Gustavo Adler,Carolina Osorio Buitron
Publisher : International Monetary Fund
Page : 25 pages
File Size : 55,7 Mb
Release : 2017-09-20
Category : Business & Economics
ISBN : 9781484320341

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Policy Mix and the US Trade Balance by Gustavo Adler,Carolina Osorio Buitron Pdf

The strong US policy response to the 2008-09 financial crisis raised concerns about its impact (spillovers) on other countries, with great focus on the monetary stimulus but little attention to fiscal policy, despite their combined deployment. Using a sign-restricted structural VAR approach, we study the trade spillovers of the post-crisis policy mix, by assessing the joint impact of monetary and fiscal policy. We find that aggregate trade effects, as reflected in the trade balance, varied across time, reflecting the different timing of fiscal and monetary stimuli, with overall positive spillovers in the immediate aftermath of the crisis. At the same time, reflecting the different transmission mechanisms of monetary policy, we find that the effects differed greatly between trading partners with fixed and flexible exchange rates. In general, our results highlight (i) the importance of studying fiscal and monetary policy spillovers jointly in order to avoid attenuation bias from omitted variables; and (ii) that trading partners’ exchange rate regimes are of first order importance in determining the impact of policy spillovers.

Author : Mr.Joseph E. Gagnon,Mr.Tamim Bayoumi,Juan M. Londono,Christian Saborowski,Horacio Sapriza
Publisher : International Monetary Fund
Page : 52 pages
File Size : 53,5 Mb
Release : 2017-03-13
Category : Business & Economics
ISBN : 9781475586237

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Direct and Spillover Effects of Unconventional Monetary and Exchange Rate Policies by Mr.Joseph E. Gagnon,Mr.Tamim Bayoumi,Juan M. Londono,Christian Saborowski,Horacio Sapriza Pdf

This paper explores the effects of unconventional monetary and exchange rate policies. We find that official foreign asset purchases have large effects on current accounts that diminish as capital mobility rises and spill over to financially integrated countries. There is an additional effect through the stock of central bank assets. Domestic asset purchases have an effect on current accounts only when capital mobility is low. We also find that rising US bond yields drive foreign yields, stock prices and depreciations, but less so on days of policy announcements. We develop a theoretical model that is broadly consistent with our results.

Author : International Monetary Fund. Fiscal Affairs Dept.,International Monetary Fund. Asia and Pacific Dept,International Monetary Fund. Strategy, Policy, & Review Department,International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 49 pages
File Size : 55,6 Mb
Release : 2013-04-18
Category : Business & Economics
ISBN : 9781498341981

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Unconventional Monetary Policies - Recent Experiences and Prospects by International Monetary Fund. Fiscal Affairs Dept.,International Monetary Fund. Asia and Pacific Dept,International Monetary Fund. Strategy, Policy, & Review Department,International Monetary Fund. Monetary and Capital Markets Department Pdf

This paper addresses three questions about unconventional monetary policies. First, what policies were tried, and with what objectives? Second, were policies effective? And third, what role might these policies continue to play in the future?

Author : Kaufman George G,Evanoff Douglas D,Malliaris Anastasios G
Publisher : World Scientific
Page : 316 pages
File Size : 40,6 Mb
Release : 2000-08-03
Category : Business & Economics
ISBN : 9789813236608

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Innovative Federal Reserve Policies During the Great Financial Crisis by Kaufman George G,Evanoff Douglas D,Malliaris Anastasios G Pdf

This book, Innovative Federal Policies During the Great Financial Crisis, contains discussions of unconventional monetary policies, policy changes to address systemic and payments systems risks, new macroprudential policies, the 'stretching' of the financial safety net, changes in the Fed's liquidity funding facility (the discount window), use of the Fed's balance sheet as a tool of monetary policy, and alternative means to deal with real-estate asset bubbles and potential financial instability. The 10 chapters in this book offer a unique analysis of several innovative approaches by the Federal Reserve that contributed to the stabilization of the US economy following the Great Recession. What unique policies were implemented? Toward what goal? Were they effective? Were there unintended consequences? Additionally, but less thoroughly, events in the Euro market are also discussed, and policies (and their impact) of the ECB are critiqued. Based on papers presented at the 91st Annual Conference of the Western Economic Association International Meetings in Portland, Oregon, 2016, Innovative Federal Policies During the Great Financial Crisis adds significantly to the debate over why innovative or unconventional policies were needed, how they were implemented and how effective they were.

Author : Naoyuki Yoshino,Pornpinun Chantapacdepong,Matthias Helble
Publisher : Oxford University Press, USA
Page : 345 pages
File Size : 49,7 Mb
Release : 2019
Category : Business & Economics
ISBN : 9780198838104

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Macroeconomic Shocks and Unconventional Monetary Policy by Naoyuki Yoshino,Pornpinun Chantapacdepong,Matthias Helble Pdf

Barely two decades after the Asian financial crisis Asia was suddenly confronted with multiple challenges originating outside the region: the 2008 global financial crisis, the European debt crisis, and finally developed economies' implementation of unconventional monetary policies. The implementation of quantitative easing, ultra-low interest rate policies, and negative interest rate policies by a number of large central banks has given rise to concerns over financial stability and international capital flows. Macroeconomic Shocks and Unconventional Monetary Policy: Impacts on Emerging Markets explains how shocks stemming from the global financial crisis have affected macroeconomic and financial stability in emerging Asia. Macroeconomic Shocks and Unconventional Monetary Policy: Impacts on Emerging Markets brings together the most up-to-date knowledge impacts of recent macroeconomic shocks on Asia's real economy; the spillover effects of macroeconomic shocks on financial markets and flows in Asia; and key challenges for monetary, exchange rate, trade and macro prudential policies of developing Asian economies. It is authored by experts in the field of international macroeconomics from leading academic institutions, central banks, and international organizations including the International Monetary Fund, the Bank for International Settlement, and the Asian Development Bank Institute.

Author : Raghuram Rajan
Publisher : MIT Press
Page : 143 pages
File Size : 44,9 Mb
Release : 2023-11-14
Category : Business & Economics
ISBN : 9780262377140

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Monetary Policy and Its Unintended Consequences by Raghuram Rajan Pdf

A call for an end to aggressive monetary policy and a return to smart growth from an eminent researcher and former central banker. Central banks took extraordinary measures to stabilize markets and enhance growth after the financial crisis of 2008, but without giving much thought to the long-term consequences. It was a response, Raghuram Rajan argues, that set a dangerous precedent: the more centrals bank did, the more they were expected to do, and the more they ended up doing. Monetary Policy and Its Unintended Consequences looks back at what this meant for where we are now. A former central banker who foresaw the 2008 crisis and wrote a bestselling book about the risks of excessively accommodative monetary policy, Rajan takes a hard look at central bank behavior and its embrace of increasingly aggressive strategies to keep economies afloat. Despite efforts to strengthen markets, the 2020 pandemic showed economies remain as vulnerable as ever to adverse shocks, prompting large-scale interventions that, in the case of Covid, led to persistent inflation and market volatility. By examining these undertheorized outcomes, Rajan hopes central banks will recognize the unintended consequences of using all of the instruments available to them, which will encourage them to return to their core mandates of low inflation and financial stability. Monetary Policy and Its Unintended Consequences is the most thorough account yet of the choices central banks have made to meet the economic challenges of our century and why they must rethink these choices.

Author : Mr.Etienne B. Yehoue,Kotaro Ishi,Mr.Mark R. Stone
Publisher : International Monetary Fund
Page : 44 pages
File Size : 46,9 Mb
Release : 2009-10-01
Category : Business & Economics
ISBN : 9781451873733

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Unconventional Central Bank Measures for Emerging Economies by Mr.Etienne B. Yehoue,Kotaro Ishi,Mr.Mark R. Stone Pdf

Unconventional central bank measures are playing a key policy role for many advanced economies in the 2007-09 global crisis. Are they playing a similar role for emerging economies? Emerging economies have widely used unconventional foreign exchange and domestic short-term liquidity easing measures. Their use of credit easing and quantitative easing measures has been much more limited. Thus, unconventional measures are much less important for emerging economies compared to advanced economies in achieving broader macroeconomic objectives. The difference can be attributed to the relatively limited financial stress in emerging economies, their external vulnerabilities and their limited scope for quasifiscal activities.

Author : Gustavo Adler,Ms.Carolina Osorio Buitron
Publisher : International Monetary Fund
Page : 22 pages
File Size : 55,6 Mb
Release : 2017-06-28
Category : Business & Economics
ISBN : 9781484303603

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Tipping the Scale? The Workings of Monetary Policy through Trade by Gustavo Adler,Ms.Carolina Osorio Buitron Pdf

Monetary policy entails demand augmenting and demand diverting effects, with its impact on the trade balance—and spillovers to other countries—depending on the relative magnitude of these opposing effects. Using US data, and a sign-restricted structural VAR identification strategy, we investigate how monetary policy shocks affects the trade balance, shedding light on the importance of the two effects. Overall, the results indicate that monetary policy has a meaningful impact on the trade balance. A monetary loosening (tightening) leads to a strengthening (weakening) of the overall trade balance, indicating that, on average, demand diversion dominates. This effect of monetary policy on trade is revealed in full when distinguisging between trading partners with fixed exchange rates—for which only demand augmenting operates—and flexible exchange rates—for which both effects operate. We also explore spillover differences between conventional and unconventional monetary policy, as well as changes in spillovers in the postcrisis period (due to an impaired monetary transmission mechanism). While our results suggest that monetary policy comes with spillovers through trade, they should not be interpreted as evidence against the use of this policy instrument as such. From a global perspective, optimal monetary policy should be assessed in conjunction with deployment of other policy measures, inclluding the ability of recipient countries to deploy their own policy measures to offset undesirable spillovers.

Author : Vladimir Klyuev,Phil De Imus,Krishna Srinivasan
Publisher : INTERNATIONAL MONETARY FUND
Page : 37 pages
File Size : 50,9 Mb
Release : 2009-11-04
Category : Electronic
ISBN : 1462382827

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Unconventional Choices for Unconventional Times Credit and Quantitative Easing in Advanced Economies by Vladimir Klyuev,Phil De Imus,Krishna Srinivasan Pdf

Author : Martin Feldstein
Publisher : University of Chicago Press
Page : 500 pages
File Size : 50,9 Mb
Release : 2007-12-01
Category : Business & Economics
ISBN : 9780226241807

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International Capital Flows by Martin Feldstein Pdf

Recent changes in technology, along with the opening up of many regions previously closed to investment, have led to explosive growth in the international movement of capital. Flows from foreign direct investment and debt and equity financing can bring countries substantial gains by augmenting local savings and by improving technology and incentives. Investing companies acquire market access, lower cost inputs, and opportunities for profitable introductions of production methods in the countries where they invest. But, as was underscored recently by the economic and financial crises in several Asian countries, capital flows can also bring risks. Although there is no simple explanation of the currency crisis in Asia, it is clear that fixed exchange rates and chronic deficits increased the likelihood of a breakdown. Similarly, during the 1970s, the United States and other industrial countries loaned OPEC surpluses to borrowers in Latin America. But when the U.S. Federal Reserve raised interest rates to control soaring inflation, the result was a widespread debt moratorium in Latin America as many countries throughout the region struggled to pay the high interest on their foreign loans. International Capital Flows contains recent work by eminent scholars and practitioners on the experience of capital flows to Latin America, Asia, and eastern Europe. These papers discuss the role of banks, equity markets, and foreign direct investment in international capital flows, and the risks that investors and others face with these transactions. By focusing on capital flows' productivity and determinants, and the policy issues they raise, this collection is a valuable resource for economists, policymakers, and financial market participants.

Author : Laurent Ferrara,Ignacio Hernando,Daniela Marconi
Publisher : Springer
Page : 298 pages
File Size : 47,8 Mb
Release : 2018-06-13
Category : Business & Economics
ISBN : 9783319790756

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International Macroeconomics in the Wake of the Global Financial Crisis by Laurent Ferrara,Ignacio Hernando,Daniela Marconi Pdf

This book collects selected articles addressing several currently debated issues in the field of international macroeconomics. They focus on the role of the central banks in the debate on how to come to terms with the long-term decline in productivity growth, insufficient aggregate demand, high economic uncertainty and growing inequalities following the global financial crisis. Central banks are of considerable importance in this debate since understanding the sluggishness of the recovery process as well as its implications for the natural interest rate are key to assessing output gaps and the monetary policy stance. The authors argue that a more dynamic domestic and external aggregate demand helps to raise the inflation rate, easing the constraint deriving from the zero lower bound and allowing monetary policy to depart from its current ultra-accommodative position. Beyond macroeconomic factors, the book also discusses a supportive financial environment as a precondition for the rebound of global economic activity, stressing that understanding capital flows is a prerequisite for economic-policy decisions.