If the Fed Acts, How Do You React? The Liftoff Effect on Capital Flows

If the Fed Acts, How Do You React? The Liftoff Effect on Capital Flows
Author: Mrs.Swarnali Ahmed Hannan
Publisher: International Monetary Fund
Total Pages: 39
Release: 2015-12-09
Genre: Business & Economics
ISBN: 1498367194
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After more than six years of ultra-low interest rates, a Fed liftoff (rate hike) is just a matter of time. This paper goes back to history to understand the spillover effect – or what is termed in the paper as the ‘liftoff’ effect – of the previous five Fed liftoffs on capital flows. Using a dynamic panel framework covering 48 countries (27 advanced economies, 21 emerging markets) over the period 1982-2006, the paper shows that the liftoff effect on capital flows (total private, portfolio) is significantly higher for emerging market economies (EM) than advanced market economies (AM). EM capital flows are hit indiscriminately one quarter before liftoff, suggesting that markets usually price in the liftoff before the actual event. Over time, there is a bit more variation among EM as policy responses/framework can to some extent dampen market reactions. The findings are similar to the unfolding of events during the taper tantrum episode indicating that, even though current circumstances are very different, history could still provide a good guidance.

If the Fed Acts, how Do You React?

If the Fed Acts, how Do You React?
Author: Swarnali Ahmed
Publisher:
Total Pages: 39
Release: 2015
Genre: Banks and banking, Central
ISBN: 9781513569734
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After more than six years of ultra-low interest rates, a Fed liftoff (rate hike) is just a matter of time. This paper goes back to history to understand the spillover effect - or what is termed in the paper as the 'liftoff' effect - of the previous five Fed liftoffs on capital flows. Using a dynamic panel framework covering 48 countries (27 advanced economies, 21 emerging markets) over the period 1982-2006, the paper shows that the liftoff effect on capital flows (total private, portfolio) is significantly higher for emerging market economies (EM) than advanced market economies (AM). EM capital flows are hit indiscriminately one quarter before liftoff, suggesting that markets usually price in the liftoff before the actual event. Over time, there is a bit more variation among EM as policy responses/framework can to some extent dampen market reactions. The findings are similar to the unfolding of events during the taper tantrum episode indicating that, even though current circumstances are very different, history could still provide a good guidance. --Abstract.

The Volatility of Capital Flows in Emerging Markets

The Volatility of Capital Flows in Emerging Markets
Author: Maria Sole Pagliari
Publisher: International Monetary Fund
Total Pages: 58
Release: 2017-03-07
Genre: Business & Economics
ISBN: 147558525X
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Capital flow volatility is a concern for macroeconomic and financial stability. Nonetheless, literature is scarce in this topic. Our paper sheds light on this issue in two dimensions. First, using quarterly data for 65 countries over the period 1970Q1-2016Q1, we construct three measures of volatility, for total capital flows and key instruments. Second, we perform panel regressions to understand the determinants of volatility. The measures show that the volatility of all instruments is prone to bouts, rising sharply during global shocks like the taper tantrum episode. Capital flow volatility thus remains a challenge for policy makers. The regression results suggest that push factors can be more important than pull factors in explaining volatility, illustrating that the characteristics of volatility can be different from those of the flows levels.

IMF Research Bulletin, March 2016

IMF Research Bulletin, March 2016
Author: International Monetary Fund. Research Dept.
Publisher: International Monetary Fund
Total Pages: 20
Release: 2016-04-06
Genre: Business & Economics
ISBN: 1484316495
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The IMF Research Bulletin includes listings of recent IMF Working Papers and Staff Discussion Notes. The research summaries in this issue are “Explaining the Recent Slump in Investment” (Mathieu Bussiere, Laurent Ferrara, and Juliana Milovich) and “The Quest for Stability in the Housing Markets” (Hites Ahir). The Q&A column reviews “Seven Questions on Estimating Monetary Transmission Mechanism in Low-Income Countries” (Bin Grace Li, Christopher Adam, and Andrew Berg). Also included in this issue are updates on the IMF’s official journal, the IMF Economic Review, and recommended readings from IMF Publications.

The Financial Crisis Inquiry Report

The Financial Crisis Inquiry Report
Author: Financial Crisis Inquiry Commission
Publisher: Cosimo, Inc.
Total Pages: 692
Release: 2011-05-01
Genre: Political Science
ISBN: 1616405414
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The Financial Crisis Inquiry Report, published by the U.S. Government and the Financial Crisis Inquiry Commission in early 2011, is the official government report on the United States financial collapse and the review of major financial institutions that bankrupted and failed, or would have without help from the government. The commission and the report were implemented after Congress passed an act in 2009 to review and prevent fraudulent activity. The report details, among other things, the periods before, during, and after the crisis, what led up to it, and analyses of subprime mortgage lending, credit expansion and banking policies, the collapse of companies like Fannie Mae and Freddie Mac, and the federal bailouts of Lehman and AIG. It also discusses the aftermath of the fallout and our current state. This report should be of interest to anyone concerned about the financial situation in the U.S. and around the world.THE FINANCIAL CRISIS INQUIRY COMMISSION is an independent, bi-partisan, government-appointed panel of 10 people that was created to "examine the causes, domestic and global, of the current financial and economic crisis in the United States." It was established as part of the Fraud Enforcement and Recovery Act of 2009. The commission consisted of private citizens with expertise in economics and finance, banking, housing, market regulation, and consumer protection. They examined and reported on "the collapse of major financial institutions that failed or would have failed if not for exceptional assistance from the government."News Dissector DANNY SCHECHTER is a journalist, blogger and filmmaker. He has been reporting on economic crises since the 1980's when he was with ABC News. His film In Debt We Trust warned of the economic meltdown in 2006. He has since written three books on the subject including Plunder: Investigating Our Economic Calamity (Cosimo Books, 2008), and The Crime Of Our Time: Why Wall Street Is Not Too Big to Jail (Disinfo Books, 2011), a companion to his latest film Plunder The Crime Of Our Time. He can be reached online at www.newsdissector.com.

The Great Inflation

The Great Inflation
Author: Michael D. Bordo
Publisher: University of Chicago Press
Total Pages: 545
Release: 2013-06-28
Genre: Business & Economics
ISBN: 0226066959
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Controlling inflation is among the most important objectives of economic policy. By maintaining price stability, policy makers are able to reduce uncertainty, improve price-monitoring mechanisms, and facilitate more efficient planning and allocation of resources, thereby raising productivity. This volume focuses on understanding the causes of the Great Inflation of the 1970s and ’80s, which saw rising inflation in many nations, and which propelled interest rates across the developing world into the double digits. In the decades since, the immediate cause of the period’s rise in inflation has been the subject of considerable debate. Among the areas of contention are the role of monetary policy in driving inflation and the implications this had both for policy design and for evaluating the performance of those who set the policy. Here, contributors map monetary policy from the 1960s to the present, shedding light on the ways in which the lessons of the Great Inflation were absorbed and applied to today’s global and increasingly complex economic environment.

International Macroeconomics in the Wake of the Global Financial Crisis

International Macroeconomics in the Wake of the Global Financial Crisis
Author: Laurent Ferrara
Publisher: Springer
Total Pages: 300
Release: 2018-06-13
Genre: Business & Economics
ISBN: 3319790757
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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.

Strengthening Forensic Science in the United States

Strengthening Forensic Science in the United States
Author: National Research Council
Publisher: National Academies Press
Total Pages: 348
Release: 2009-07-29
Genre: Law
ISBN: 0309142393
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Scores of talented and dedicated people serve the forensic science community, performing vitally important work. However, they are often constrained by lack of adequate resources, sound policies, and national support. It is clear that change and advancements, both systematic and scientific, are needed in a number of forensic science disciplines to ensure the reliability of work, establish enforceable standards, and promote best practices with consistent application. Strengthening Forensic Science in the United States: A Path Forward provides a detailed plan for addressing these needs and suggests the creation of a new government entity, the National Institute of Forensic Science, to establish and enforce standards within the forensic science community. The benefits of improving and regulating the forensic science disciplines are clear: assisting law enforcement officials, enhancing homeland security, and reducing the risk of wrongful conviction and exoneration. Strengthening Forensic Science in the United States gives a full account of what is needed to advance the forensic science disciplines, including upgrading of systems and organizational structures, better training, widespread adoption of uniform and enforceable best practices, and mandatory certification and accreditation programs. While this book provides an essential call-to-action for congress and policy makers, it also serves as a vital tool for law enforcement agencies, criminal prosecutors and attorneys, and forensic science educators.

Bulletin of the Atomic Scientists

Bulletin of the Atomic Scientists
Author:
Publisher:
Total Pages: 116
Release: 1970-06
Genre:
ISBN:
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The Bulletin of the Atomic Scientists is the premier public resource on scientific and technological developments that impact global security. Founded by Manhattan Project Scientists, the Bulletin's iconic "Doomsday Clock" stimulates solutions for a safer world.

Global Waves of Debt

Global Waves of Debt
Author: M. Ayhan Kose
Publisher: World Bank Publications
Total Pages: 403
Release: 2021-03-03
Genre: Business & Economics
ISBN: 1464815453
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The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.