Policy Responses To External Imbalances In Emerging Market Economies

Policy Responses To External Imbalances In Emerging Market Economies Book in PDF, ePub and Kindle version is available to download in english. Read online anytime anywhere directly from your device. Click on the download button below to get a free pdf file of Policy Responses To External Imbalances In Emerging Market Economies book. This book definitely worth reading, it is an incredibly well-written.

Policy Responses to External Imbalances in Emerging Market Economies

Mr.Chorng-Huey Wong,Luis Carranza
Policy Responses to External Imbalances in Emerging Market Economies Book PDF

Author : Mr.Chorng-Huey Wong,Luis Carranza
Publisher : International Monetary Fund
Page : 31 pages
File Size : 40,7 Mb
Release : 1998-07-01
Category : Business & Economics
ISBN : 9781451948189

Get Book

Policy Responses to External Imbalances in Emerging Market Economies by Mr.Chorng-Huey Wong,Luis Carranza Pdf

A bivariate vector-autoregression (VAR) model is used to test causal relations between the current account and the capital account in four emerging market economies. The results show that high capital mobility could be a major cause of current account instability. Therefore, macroeconomic policy to restore external balance must deal directly with capital inflows. The paper recommends making nominal exchange rate sufficiently flexible to avoid inconsistencies between short-run and long-run real exchange rates; complementing credit tightening by fiscal restraint to reduce interest rate differentials; and strengthening reforms and surveillance of the financial system to prevent banks from excessive risk taking.

Capital Inflows and Balance of Payments Pressures

Mr.Juan Zalduendo,Ms.Manuela Goretti,Mr.Bikas Joshi,Mr.Atish R. Ghosh,Ms.Uma Ramakrishnan,Mr.Alun H. Thomas
Capital Inflows and Balance of Payments Pressures Book PDF

Author : Mr.Juan Zalduendo,Ms.Manuela Goretti,Mr.Bikas Joshi,Mr.Atish R. Ghosh,Ms.Uma Ramakrishnan,Mr.Alun H. Thomas
Publisher : International Monetary Fund
Page : 21 pages
File Size : 43,5 Mb
Release : 2008-06-01
Category : Business & Economics
ISBN : 9781451945997

Get Book

Capital Inflows and Balance of Payments Pressures by Mr.Juan Zalduendo,Ms.Manuela Goretti,Mr.Bikas Joshi,Mr.Atish R. Ghosh,Ms.Uma Ramakrishnan,Mr.Alun H. Thomas Pdf

Although capital inflows are generally beneficial to recipient countries, they also pose a challenge for the conduct of economic policy. This paper proposes a conceptual taxonomy to guide the design of policy responses in the face of capital flows. We explore how responses to capital surges should be differentiated based on the source of balance of payments pressures. We also examine whether the policy choices in emerging market countries conform to the taxonomy's predictions and find some correspondence, especially during periods of high global liquidity.

Policy Responses to Capital Flows in Emerging Markets

Mahmood Pradhan,Mr.Ravi Balakrishnan,Reza Baqir,Mr.Geoffrey Heenan,Sylwia Nowak,Ceyda Oner,Mr.Sanjaya Panth
Policy Responses to Capital Flows in Emerging Markets Book PDF

Author : Mahmood Pradhan,Mr.Ravi Balakrishnan,Reza Baqir,Mr.Geoffrey Heenan,Sylwia Nowak,Ceyda Oner,Mr.Sanjaya Panth
Publisher : International Monetary Fund
Page : 45 pages
File Size : 46,5 Mb
Release : 2011-04-20
Category : Business & Economics
ISBN : 9781463935122

Get Book

Policy Responses to Capital Flows in Emerging Markets by Mahmood Pradhan,Mr.Ravi Balakrishnan,Reza Baqir,Mr.Geoffrey Heenan,Sylwia Nowak,Ceyda Oner,Mr.Sanjaya Panth Pdf

Staff Discussion Notes showcase the latest policy-related analysis and research being developed by individual IMF staff and are published to elicit comment and to further debate. These papers are generally brief and written in nontechnical language, and so are aimed at a broad audience interested in economic policy issues. This Web-only series replaced Staff Position Notes in January 2011.

One Shock, Many Policy Responses

Rui Mano,Ms.Silvia Sgherri
One Shock Many Policy Responses Book PDF

Author : Rui Mano,Ms.Silvia Sgherri
Publisher : International Monetary Fund
Page : 44 pages
File Size : 40,7 Mb
Release : 2020-01-17
Category : Business & Economics
ISBN : 9781513521503

Get Book

One Shock, Many Policy Responses by Rui Mano,Ms.Silvia Sgherri Pdf

Policymakers have relied on a wide range of policy tools to cope with capital flow shocks. And yet, the effects and interaction of these policies remain under debate, as does the motivation for using them. In this paper, quantile local projections are used to estimate the entire distribution of future policy responses to portfolio flow shocks for 20 emerging markets and understand the variety of policy choices across the sample. To assuage endogeneity concerns, estimates rely on the fact that global capital flows are exogenous from the viewpoint of any one of these countries. The paper finds that: (i) policy responses to capital flow shocks are heterogeneous across countries, fat-tailed—“extreme” responses tend to be more elastic than “typical” responses—and asymmetric—“extreme” responses tend to be more elastic with respect to outflows than to inflows; (ii) country characteristics are linked to policy choices—with cross-country differences in forex intervention relating to the size of balance sheet vulnerabilities and the depth of the forex market; (iii) the use of targeted macroprudential policy and capital flows management measures can help “free the hands” of monetary policy by allowing it to focus more squarely on domestic cyclical developments.

Preemptive Policies and Risk-Off Shocks in Emerging Markets

Ms. Mitali Das,Ms. Gita Gopinath,Şebnem Kalemli-Özcan
Preemptive Policies and Risk Off Shocks in Emerging Markets Book PDF

Author : Ms. Mitali Das,Ms. Gita Gopinath,Şebnem Kalemli-Özcan
Publisher : International Monetary Fund
Page : 54 pages
File Size : 49,6 Mb
Release : 2022-01-07
Category : Business & Economics
ISBN : 9781616358341

Get Book

Preemptive Policies and Risk-Off Shocks in Emerging Markets by Ms. Mitali Das,Ms. Gita Gopinath,Şebnem Kalemli-Özcan Pdf

We show that “preemptive” capital flow management measures (CFM) can reduce emerging markets and developing countries’ (EMDE) external finance premia during risk-off shocks, especially for vulnerable countries. Using a panel dataset of 56 EMDEs during 1996–2020 at monthly frequency, we document that countries with preemptive policies in place during the five year window before risk-off shocks experienced relatively lower external finance premia and exchange rate volatility during the shock compared to countries which did not have such preemptive policies in place. We use the episodes of Taper Tantrum and COVID-19 as risk-off shocks. Our identification relies on a difference-in-differences methodology with country fixed effects where preemptive policies are ex-ante by construction and cannot be put in place as a response to the shock ex-post. We control the effects of other policies, such as monetary policy, foreign exchange interventions (FXI), easing of inflow CFMs and tightening of outflow CFMs that are used in response to the risk-off shocks. By reducing the impact of risk-off shocks on countries’ funding costs and exchange rate volatility, preemptive policies enable countries’ continued access to international capital markets during troubled times.

Reconstructing the World Economy

Mr.Olivier J. Blanchard,Il SaKong
Reconstructing the World Economy Book PDF

Author : Mr.Olivier J. Blanchard,Il SaKong
Publisher : International Monetary Fund
Page : 168 pages
File Size : 46,9 Mb
Release : 2010-07-19
Category : Business & Economics
ISBN : MINN:31951D03226320T

Get Book

Reconstructing the World Economy by Mr.Olivier J. Blanchard,Il SaKong Pdf

This volume presents papers from a conference organized by the Korea Development Institute and the IMF. The purpose of this high-level conference was for policymakers and academics from the Asian region and from G-20 countries to discuss forward-looking economic and financial issues of interest to the international community, such as restoring normalcy to fiscal policy, macroprudential regulation, the future of the financial system, global fiscal imbalances, and the international monetary system. Topics include: (1) A strategy for renormalizing fiscal and monetary policies in advanced economies. Key principles for restoring financial stability in the wake of the crisis, including the timing and sequence for exit, are identified. (2) Rethinking macroeconomic policy. This section examines if and how macroeconomic policy should respond to sectoral imbalances and asset-price and housing imbalances, as well as a potential role for macroprudential regulation. (3) Redesigning the financial system of the future. Responses by both policymakers and the private sector to recent events are evaluated in terms of how they will shape the future financial system and its role in the global economy. (4) Global imbalances. The argument is made that there is an urgent need to address the domestic and international distortions that are a key cause of imbalances; failure to do so would threaten the sustainability of the recovery. (5) The future of the international monetary system. Steps that can be taken to address the inherent weaknesses in the current system are described, including possible solutions on both the demand side and on the supply side.

Global Financial Stability Report, October 2019

International Monetary Fund. Monetary and Capital Markets Department
Global Financial Stability Report October 2019 Book PDF

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 109 pages
File Size : 49,8 Mb
Release : 2019-10-16
Category : Business & Economics
ISBN : 9781498324021

Get Book

Global Financial Stability Report, October 2019 by International Monetary Fund. Monetary and Capital Markets Department Pdf

The October 2019 Global Financial Stability Report (GFSR) identifies the current key vulnerabilities in the global financial system as the rise in corporate debt burdens, increasing holdings of riskier and more illiquid assets by institutional investors, and growing reliance on external borrowing by emerging and frontier market economies. The report proposes that policymakers mitigate these risks through stricter supervisory and macroprudential oversight of firms, strengthened oversight and disclosure for institutional investors, and the implementation of prudent sovereign debt management practices and frameworks for emerging and frontier market economies.

Global Financial Stability Report, April 2021

International Monetary Fund
Global Financial Stability Report April 2021 Book PDF

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 92 pages
File Size : 47,7 Mb
Release : 2021-04-06
Category : Business & Economics
ISBN : 9781513569673

Get Book

Global Financial Stability Report, April 2021 by International Monetary Fund Pdf

Extraordinary policy measures have eased financial conditions and supported the economy, helping to contain financial stability risks. Chapter 1 warns that there is a pressing need to act to avoid a legacy of vulnerabilities while avoiding a broad tightening of financial conditions. Actions taken during the pandemic may have unintended consequences such as stretched valuations and rising financial vulnerabilities. The recovery is also expected to be asynchronous and divergent between advanced and emerging market economies. Given large external financing needs, several emerging markets face challenges, especially if a persistent rise in US rates brings about a repricing of risk and tighter financial conditions. The corporate sector in many countries is emerging from the pandemic overindebted, with notable differences depending on firm size and sector. Concerns about the credit quality of hard-hit borrowers and profitability are likely to weigh on the risk appetite of banks. Chapter 2 studies leverage in the nonfinancial private sector before and during the COVID-19 crisis, pointing out that policymakers face a trade-off between boosting growth in the short term by facilitating an easing of financial conditions and containing future downside risks. This trade-off may be amplified by the existing high and rapidly building leverage, increasing downside risks to future growth. The appropriate timing for deployment of macroprudential tools should be country-specific, depending on the pace of recovery, vulnerabilities, and policy tools available. Chapter 3 turns to the impact of the COVID-19 crisis on the commercial real estate sector. While there is little evidence of large price misalignments at the onset of the pandemic, signs of overvaluation have now emerged in some economies. Misalignments in commercial real estate prices, especially if they interact with other vulnerabilities, increase downside risks to future growth due to the possibility of sharp price corrections.

External Sector Report, July 2019

International Monetary Fund. Monetary and Capital Markets Department
External Sector Report July 2019 Book PDF

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 116 pages
File Size : 45,9 Mb
Release : 2019-07-17
Category : Business & Economics
ISBN : 9781498318976

Get Book

External Sector Report, July 2019 by International Monetary Fund. Monetary and Capital Markets Department Pdf

The IMF’s 2019 External Sector Report shows that global current account balances stand at about 3 percent of global GDP. Of this, about 35–45 percent are now deemed excessive. Meanwhile, net credit and debtor positions are at historical peaks and about four times larger than in the early 1990s. Short-term financing risks from the current configuration of external imbalances are generally contained, as debtor positions are concentrated in reserve-currency-issuing advanced economies. An intensification of trade tensions or a disorderly Brexit outcome—with further repercussions for global growth and risk aversion—could, however, affect other economies that are highly dependent on foreign demand and external financing. With output near potential in most systemic economies, a well-calibrated macroeconomic and structural policy mix is necessary to support rebalancing. Recent trade policy actions are weighing on global trade flows, investment, and growth, including through confidence effects and the disruption of global supply chains, with no discernible impact on external imbalances thus far.

Emerging Market Volatility

Ms.Ratna Sahay,Mr.Vivek B. Arora,Mr.Athanasios V Arvanitis,Mr.Hamid Faruqee,Mr.Papa N'Diaye,Mr.Tommaso Mancini Griffoli
Emerging Market Volatility Book PDF

Author : Ms.Ratna Sahay,Mr.Vivek B. Arora,Mr.Athanasios V Arvanitis,Mr.Hamid Faruqee,Mr.Papa N'Diaye,Mr.Tommaso Mancini Griffoli
Publisher : International Monetary Fund
Page : 29 pages
File Size : 41,7 Mb
Release : 2014-10-02
Category : Business & Economics
ISBN : 9781484356005

Get Book

Emerging Market Volatility by Ms.Ratna Sahay,Mr.Vivek B. Arora,Mr.Athanasios V Arvanitis,Mr.Hamid Faruqee,Mr.Papa N'Diaye,Mr.Tommaso Mancini Griffoli Pdf

Accommodative monetary policies in advanced economies have spurred increased capital inflows into emerging markets since the global financial crisis. Starting in May 2013, when the Federal Reserve publicly discussed its plans for tapering unconventional monetary policies, these emerging markets have experienced financial turbulence at the same that their domestic economic activity has slowed. This paper examines their experiences and policy responses and draws broad policy lessons. For emerging markets, good macroeconomic fundamentals matter, and early and decisive measures to strengthen macroeconomic policies and reduce vulnerabilities help dampen market reactions to external shocks. For advanced economies, clear and effective communication about the exit from unconventional monetary policy can and did help later to reduce the risk of excessive market volatility. And for the global community, enhanced global cooperation, including a strong global financial safety net, offers emerging markets effective protection against excessive volatility.

Monetary Policy Transmission in an Emerging Market Setting

Ila Patnaik,Ajay Shah,Rudrani Bhattacharya
Monetary Policy Transmission in an Emerging Market Setting Book PDF

Author : Ila Patnaik,Ajay Shah,Rudrani Bhattacharya
Publisher : International Monetary Fund
Page : 28 pages
File Size : 54,5 Mb
Release : 2011-01-01
Category : Business & Economics
ISBN : 9781455214884

Get Book

Monetary Policy Transmission in an Emerging Market Setting by Ila Patnaik,Ajay Shah,Rudrani Bhattacharya Pdf

Some emerging economies have a relatively ineffective monetary policy transmission owing to weaknesses in the domestic financial system and the presence of a large and segmented informal sector. At the same time, small open economies can have a substantial monetary policy transmission through the exchange rate channel. In order to understand this setting, we explore a unified treatment of monetary policy transmission and exchangerate pass-through. The results for an emerging market, India, suggest that the most effective mechanism through which monetary policy impacts inflation runs through the exchange rate.

Financial Crises

Mr.Stijn Claessens,Mr.Ayhan Kose,Mr.Luc Laeven,Mr.Fabian Valencia
Financial Crises Book PDF

Author : Mr.Stijn Claessens,Mr.Ayhan Kose,Mr.Luc Laeven,Mr.Fabian Valencia
Publisher : International Monetary Fund
Page : 670 pages
File Size : 48,9 Mb
Release : 2014-02-19
Category : Business & Economics
ISBN : 9781475543407

Get Book

Financial Crises by Mr.Stijn Claessens,Mr.Ayhan Kose,Mr.Luc Laeven,Mr.Fabian Valencia Pdf

The lingering effects of the economic crisis are still visible—this shows a clear need to improve our understanding of financial crises. This book surveys a wide range of crises, including banking, balance of payments, and sovereign debt crises. It begins with an overview of the various types of crises and introduces a comprehensive database of crises. Broad lessons on crisis prevention and management, as well as the short-term economic effects of crises, recessions, and recoveries, are discussed.

Emerging Market Economies and Financial Globalization

Leonardo E. Stanley
Emerging Market Economies and Financial Globalization Book PDF

Author : Leonardo E. Stanley
Publisher : Anthem Press
Page : 260 pages
File Size : 44,9 Mb
Release : 2018-03-15
Category : Business & Economics
ISBN : 9781783086757

Get Book

Emerging Market Economies and Financial Globalization by Leonardo E. Stanley Pdf

In the past, foreign shocks arrived to national economies mainly through trade channels, and transmissions of such shocks took time to come into effect. However, after capital globalization, shocks spread to markets almost immediately. Despite the increasing macroeconomic dangers that the situation generated at emerging markets in the South, nobody at the North was ready to acknowledge the pro-cyclicality of the financial system and the inner weakness of “decontrolled” financial innovations because they were enjoying from the “great moderation.” Monetary policy was primarily centered on price stability objectives, without considering the mounting credit and asset price booms being generated by market liquidity and the problems generated by this glut. Mainstream economists, in turn, were not majorly attracted in integrating financial factors in their models. External pressures on emerging market economies (EMEs) were not eliminated after 2008, but even increased as international capital flows augmented in relevance thereafter. Initially economic authorities accurately responded to the challenge, but unconventional monetary policies in the US began to create important spillovers in EMEs. Furthermore, in contrast to a previous surge in liquidity, funds were now transmitted to EMEs throughout the bond market. The perspective of an increase in US interest rates by the FED is generating a reversal of expectations and a sudden flight to quality. Emerging countries’ currencies began to experience higher volatility levels, and depreciation movements against a newly strong US dollar are also increasingly observed. Consequently, there are increasing doubts that the “unexpected” favorable outcome observed in most EMEs at the aftermath of the Global Financial Crisis (GFC) would remain.

Financial Crises Explanations, Types, and Implications

Mr.Stijn Claessens,Mr.Ayhan Kose
Financial Crises Explanations Types and Implications Book PDF

Author : Mr.Stijn Claessens,Mr.Ayhan Kose
Publisher : International Monetary Fund
Page : 66 pages
File Size : 51,7 Mb
Release : 2013-01-30
Category : Business & Economics
ISBN : 9781475561005

Get Book

Financial Crises Explanations, Types, and Implications by Mr.Stijn Claessens,Mr.Ayhan Kose Pdf

This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.

International Capital Flows

Martin Feldstein
International Capital Flows Book PDF

Author : Martin Feldstein
Publisher : University of Chicago Press
Page : 500 pages
File Size : 54,8 Mb
Release : 2007-12-01
Category : Business & Economics
ISBN : 9780226241807

Get Book

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.