Author: Thomas D. Willett Publisher: Routledge ISBN: 0429723636 Category : Political Science Languages : en Pages : 265
Book Description
There has been fierce debate about the optimal sequencing of economic reforms in emerging market economies. Many economists argue that for market-oriented systems to operate effectively, a reasonable degree of monetary stability is necessary. Rampant inflation, a common challenge for emerging economies, greatly reduces the chances that market-oriented reforms will be successful. In this comprehensive volume, a group of policy-oriented economists from North America, Europe, and the former Soviet Union explore the causes of monetary instability in reforming economies and evaluate alternative institutional mechanisms designed to reduce inflationary pressures. Considering the latest theoretical and empirical research–as well as the experiences of former Communist countries, including Russia and the erstwhile Soviet republics–the contributors view inflation as a political issue and make a case for the creation of strong political institutions. They argue that although government actions that stimulate inflation tend to have low costs or even benefits in the sort run, they impose heavy costs on the economy in the longer term. Consequently, there is a strong need to develop institutional mechanisms to help ensure that decision makers place appropriate emphasis on the long-run consequences of policy actions.
Author: Gill Hammond Publisher: Edward Elgar Publishing ISBN: 1848449194 Category : Business & Economics Languages : en Pages : 369
Book Description
Financial globalisation has made the formulation of monetary policy in emerging market economies increasingly complicated. This timely set of studies looks at the turmoil in global financial markets, which, coupled with volatile inflation, poses serious challenges for central banks in these countries. The book features a number of specially commissioned new papers from both front-line policymakers and researchers in developing and emerging market economies, which tackle the difficult issues currently being debated with increasing urgency by monetary policy theorists and policymakers around the world. They address questions such as: What monetary policy framework is most suitable for emerging market countries to confront the new challenges while they continue to open up to trade and financial flows? , What are the linkages between monetary stability and financial stability? and Is inflation targeting or a fixed exchange rate regime preferable for developing and emerging markets? Providing unique insights on the interaction between the theory and practice of monetary policy in emerging markets, this book will be of great interest to academics and students of economics, economic policy and development economics. Policymakers will also find this to be a useful and thought-provoking read.
Author: Mr.Luis Brandao-Marques Publisher: International Monetary Fund ISBN: 1513529730 Category : Business & Economics Languages : en Pages : 54
Book Description
Central banks in emerging and developing economies (EMDEs) have been modernizing their monetary policy frameworks, often moving toward inflation targeting (IT). However, questions regarding the strength of monetary policy transmission from interest rates to inflation and output have often stalled progress. We conduct a novel empirical analysis using Jordà’s (2005) approach for 40 EMDEs to shed a light on monetary transmission in these countries. We find that interest rate hikes reduce output growth and inflation, once we explicitly account for the behavior of the exchange rate. Having a modern monetary policy framework—adopting IT and independent and transparent central banks—matters more for monetary transmission than financial development.
Author: Naoyuki Yoshino Publisher: Oxford University Press ISBN: 0192575198 Category : Business & Economics Languages : en Pages : 384
Book Description
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: Leonardo E. Stanley Publisher: Anthem Press ISBN: 1783086750 Category : Business & Economics Languages : en Pages : 260
Book Description
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.
Author: Jongrim Ha Publisher: World Bank Publications ISBN: 1464813760 Category : Business & Economics Languages : en Pages : 513
Book Description
This is the first comprehensive study in the context of EMDEs that covers, in one consistent framework, the evolution and global and domestic drivers of inflation, the role of expectations, exchange rate pass-through and policy implications. In addition, the report analyzes inflation and monetary policy related challenges in LICs. The report documents three major findings: In First, EMDE disinflation over the past four decades was to a significant degree a result of favorable external developments, pointing to the risk of rising EMDE inflation if global inflation were to increase. In particular, the decline in EMDE inflation has been supported by broad-based global disinflation amid rapid international trade and financial integration and the disruption caused by the global financial crisis. While domestic factors continue to be the main drivers of short-term movements in EMDE inflation, the role of global factors has risen by one-half between the 1970s and the 2000s. On average, global shocks, especially oil price swings and global demand shocks have accounted for more than one-quarter of domestic inflation variatio--and more in countries with stronger global linkages and greater reliance on commodity imports. In LICs, global food and energy price shocks accounted for another 12 percent of core inflation variatio--half more than in advanced economies and one-fifth more than in non-LIC EMDEs. Second, inflation expectations continue to be less well-anchored in EMDEs than in advanced economies, although a move to inflation targeting and better fiscal frameworks has helped strengthen monetary policy credibility. Lower monetary policy credibility and exchange rate flexibility have also been associated with higher pass-through of exchange rate shocks into domestic inflation in the event of global shocks, which have accounted for half of EMDE exchange rate variation. Third, in part because of poorly anchored inflation expectations, the transmission of global commodity price shocks to domestic LIC inflation (combined with unintended consequences of other government policies) can have material implications for poverty: the global food price spikes in 2010-11 tipped roughly 8 million people into poverty.
Author: Jean-François Segalotto Publisher: International Monetary Fund ISBN: Category : Business & Economics Languages : en Pages : 44
Book Description
This paper presents an update of the Grilli-Masciandaro-Tabellini (GMT) index of central bank (CB) autonomy, based on CB legislation as of end-2003. The index is applied to a set of OECD and developing countries, and emerging market economies. For a smaller set of countries, the paper presents a reconstruction of the GMT index based on Cukierman (1992) and assesses changes in CB autonomy between 1992 and 2003. The results point to a significant increase in CB autonomy, in particular for developing countries. In most cases, this improvement has involved a three-stage process: an initial stage in which the political foundations for CB autonomy are laid; a second stage in which operational autonomy develops; and a final stage in which CBs gain further political autonomy in terms of policy formulation and the appointment of senior management.
Author: Bank for International Settlements Publisher: ISBN: Category : Capital market Languages : en Pages : 106
Book Description
Develops a concerted international strategy to promote the establishment, adoption and implementation of sound principles and practices needs for financial stability.
Author: Mr.Etienne B. Yehoue Publisher: International Monetary Fund ISBN: 1451873735 Category : Business & Economics Languages : en Pages : 44
Book Description
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: Thomas D. Willett
Author: Gill Hammond
Author: Mr.Luis Brandao-Marques
Author: Naoyuki Yoshino
Author: Otaviano Canuto
Author: Leonardo E. Stanley
Author: Jongrim Ha
Author: Jean-François Segalotto
Author: Bank for International Settlements
Author: Mr.Etienne B. Yehoue