Preemptive Policies And Risk Off Shocks In Emerging Markets
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Author | : Ms. Mitali Das |
Publisher | : International Monetary Fund |
Total Pages | : 54 |
Release | : 2022-01-07 |
Genre | : Business & Economics |
ISBN | : 1616358343 |
Download Preemptive Policies and Risk-Off Shocks in Emerging Markets Book in PDF, Epub and Kindle
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.
Author | : Mitali Das |
Publisher | : |
Total Pages | : 0 |
Release | : 2022 |
Genre | : Capital movements |
ISBN | : |
Download Preemptive Policies and Risk-Off Shocks in Emerging Markets Book in PDF, Epub and Kindle
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.
Author | : Ricardo Caballero |
Publisher | : |
Total Pages | : |
Release | : 2019 |
Genre | : |
ISBN | : |
Download On the Global Impact of Risk-off Shocks and Policy-put Frameworks Book in PDF, Epub and Kindle
Author | : Stephanie Schmitt-Grohé |
Publisher | : Princeton University Press |
Total Pages | : 483 |
Release | : 2022-09-06 |
Genre | : Business & Economics |
ISBN | : 0691189544 |
Download International Macroeconomics Book in PDF, Epub and Kindle
An essential introduction to one of the most timely and important subjects in economics International Macroeconomics presents a rigorous and theoretically elegant treatment of real-world international macroeconomic problems, incorporating the latest economic research while maintaining a microfounded, optimizing, and dynamic general equilibrium approach. This one-of-a-kind textbook introduces a basic model and applies it to fundamental questions in international economics, including the determinants of the current account in small and large economies, processes of adjustment to shocks, the determinants of the real exchange rate, the role of fixed and flexible exchange rates in models with nominal rigidities, and interactions between monetary and fiscal policy. The book confronts theoretical predictions using actual data, highlighting both the power and limits of given theories and encouraging critical thinking. Provides a rigorous and elegant treatment of fundamental questions in international macroeconomics Brings undergraduate and master’s instruction in line with modern economic research Follows a microfounded, optimizing, and dynamic general equilibrium approach Addresses fundamental questions in international economics, such as the role of capital controls in the presence of financial frictions and balance-of-payments crises Uses real-world data to test the predictions of theoretical models Features a wealth of exercises at the end of each chapter that challenge students to hone their theoretical skills and scrutinize the empirical relevance of models Accompanied by a website with lecture slides for every chapter
Author | : Ms.Ana Corbacho |
Publisher | : International Monetary Fund |
Total Pages | : 311 |
Release | : 2018-10-02 |
Genre | : Business & Economics |
ISBN | : 1513558900 |
Download The ASEAN Way Book in PDF, Epub and Kindle
The first part of the book examines the evolution of monetary policy and prudential frameworks of the ASEAN5, with particular focus on changes since the Asian financial crisis and the more recent period of unconventional monetary policy in advanced economies. The second part of the book looks at policy responses to global financial spillovers. The third and last part of the book elaborates on the challenges ahead for monetary policy, financial stability frameworks, and the deepening of financial markets.
Author | : International Monetary Fund |
Publisher | : INTERNATIONAL MONETARY FUND |
Total Pages | : 54 |
Release | : 2020-10-08 |
Genre | : Business & Economics |
ISBN | : 9781513558769 |
Download Toward an Integrated Policy Framework Book in PDF, Epub and Kindle
Policymakers often face difficult tradeoffs in pursuing domestic and external stabilization objectives. The paper reflects staff’s work to advance the understanding of the policy options and tradeoffs available to policymakers in a systematic and analytical way. The paper recognizes that the optimal path of the IPF tools depends on structural characteristics and fiscal policies. The operational implications of IPF findings require careful consideration. Developing safeguards to minimize the risk of inappropriate use of IPF policies will be essential. Staff remains guided by the Fund’s Institutional View (IV) on the Liberalization and Management of Capital Flows.
Author | : Dunhong Jin |
Publisher | : International Monetary Fund |
Total Pages | : 46 |
Release | : 2019-11-01 |
Genre | : Business & Economics |
ISBN | : 1513519492 |
Download Swing Pricing and Fragility in Open-end Mutual Funds Book in PDF, Epub and Kindle
How to prevent runs on open-end mutual funds? In recent years, markets have observed an innovation that changed the way open-end funds are priced. Alternative pricing rules (known as swing pricing) adjust funds’ net asset values to pass on funds’ trading costs to transacting shareholders. Using unique data on investor transactions in U.K. corporate bond funds, we show that swing pricing eliminates the first-mover advantage arising from the traditional pricing rule and significantly reduces redemptions during stress periods. The positive impact of alternative pricing rules on fund flows reverses in calm periods when costs associated with higher tracking error dominate the pricing effect.
Author | : |
Publisher | : World Bank Publications |
Total Pages | : 432 |
Release | : 1997 |
Genre | : Business & Economics |
ISBN | : 9780195211160 |
Download Private Capital Flows to Developing Countries Book in PDF, Epub and Kindle
This book analyzes the process of international financial integration and the structural forces driving private capital to developing countries. Against this background, it details the potential benefits of integration and the implications of fast-moving global capital flows for emerging economics. Examining the experience of countries that have attracted substantial private capital flows, the book provides invaluable guidance as to what works and what doesn't during the transition to financial integration. It will be of compelling interest to policymakers and also to international investors and bankers, financial analysts, and researchers.
Author | : International Monetary Fund |
Publisher | : International Monetary Fund |
Total Pages | : 45 |
Release | : 2014-06-11 |
Genre | : Business & Economics |
ISBN | : 1498342620 |
Download Staff Guidance Note on Macroprudential Policy Book in PDF, Epub and Kindle
This note provides guidance to facilitate the staff’s advice on macroprudential policy in Fund surveillance. It elaborates on the principles set out in the “Key Aspects of Macroprudential Policy,” taking into account the work of international standard setters as well as the evolving country experience with macroprudential policy. The main note is accompanied by supplements offering Detailed Guidance on Instruments and Considerations for Low Income Countries
Author | : Mr. Eugenio M Cerutti |
Publisher | : International Monetary Fund |
Total Pages | : 49 |
Release | : 2023-02-10 |
Genre | : Business & Economics |
ISBN | : |
Download Uncovering CIP Deviations in Emerging Markets: Distinctions, Determinants and Disconnect Book in PDF, Epub and Kindle
We provide a systematic empirical treatment of short-term Covered Interest Parity (CIP) deviations for a large set of emerging market (EM) currencies. EM CIP deviations have much larger volatilities than most G10 currencies and move in an opposite direction during global risk-off episodes. While off-shore EM CIP deviations are sensitive to changes in FX dealers’ risk-bearing capacities and global risk aversion, on-shore EM CIP deviations are largely unresponsive in segmented FX markets. Moreover, the sensitivity of offshore EM CIP deviations to global risk factors for currencies with segmented FX markets is stronger compared to their counterparts with integrated FX markets. We find weak evidence of country default risk affecting EM CIP deviations after accounting for global factors.