Download or read book Essays on Monetary Policy in Emerging Economies written by Marc Pourroy and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This PhD dissertation is made of four papers on central banking in inflation-targeting emerging economies. The first part of the dissertation is dedicated to two empirical works, based on the experiences of the 19 emerging economies that have adopted an inflation-targeting framework. I examine what exchange rate arrangement these economies are implementing together with the inflation targeting strategy, and what can explain their choice. ln the first chapter, I propose a new method to build up taxonomies of exchange-rate regimes. My approach is based on Gaussian mixture estimates. ln the second chapter, the choices for exchange-rate arrangements are explained though panel econometrics analysis. The second part of the dissertation is about the theory of optimal monetary policy. ln the first chapter, I propose an original dynamic stochastic general equilibrium model to study what should monetary policy do when food price hikes, in a small open emerging economy. ln the last chapter, a similar modeling approach is used to analysis how credit constraints impact monetary policy in financially venerable emerging economies.

Download or read book Essays on Monetary Policy in Emerging Market Economies written by Selim Ali Elekdaǧ and published by . This book was released on 2004 with total page 225 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Monetary Policy in Emerging Markets written by Magnus Saxegaard and published by . This book was released on 2006 with total page 524 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Examining Monetary Policy in Emerging Countries written by Kulakarn Tantitemit and published by . This book was released on 2008 with total page 240 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays, which provides insights into monetary policy of emerging countries in various aspects. The first essay thoroughly investigates how the central banks in two emerging countries; Korea and Thailand, respond to economic fluctuations and observe whether their monetary policies have comparable effects on the economies. Carefully taken into account of time-series properties and the regression stability, many econometric tests are applied and the fully modified OLS with the block bootstrap is performed on their monetary policy rules to get unbiased estimation. The evidence indicates the differences of monetary policy between pre- and post-crisis and suggests that although both countries have similar economic conditions and announce the same monetary policy, the degree on stabilizing the economy in each country using the interest rate instrument is noticeably different. The second essay examines if New Keynesian type model, which is recently popular in explaining many developed economies, can as well explain an emerging economy such as Thailand in this case. The evidence suggests that simulating a New Keynesian small open economy model can capture some characteristics of Thai monetary data where their volatilities are close to volatilities of actual data, but only when the central bank is assumed to follows the Taylor rule that incorporates interest rate smoothing policy. However, comparing with the structural VAR model, the simulated model may not generate the correct size of impulse responses for Thai economy. Even so, impulse responses from both models support the implementation of explicit inflation targeting in Thailand. The last essay examines if emerging countries that implement inflation targeting are constrained by fiscal policy since these countries adopt inflation targeting recently without verifying the independence of their central banks. We observe that the interest rate setting process in inflation targeting emerging countries are not influenced by fiscal policy, and also find that the interest rate setting process of these countries are clearly different from the process of emerging countries that do not adopt inflation targeting, while it is similar to the process of industrial countries that also adopt inflation targeting.

Download or read book Essays on Monetary Policy in Emerging Market Economies written by Phakawa Jeasakul and published by . This book was released on 2011 with total page 570 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation addresses a number of important monetary policy issues in emerging markets, which are primarily related to capital flows and exchange rate movements and largely motivated by Thailand's experience. Thus, Chapter 1 reviews background information on Thailand's macroeconomic developments in the context of large and rapid exchange rate appreciation during 2006-2008. Chapter 2 develops a micro-founded macroeconomic model in which sterilized foreign-exchange (FX) interventions are effective in influencing currency movements as well as real allocations. The effectiveness of FX interventions rests on the existence of liquidity benefits from holding financial assets. The analysis shows that such sterilized FX interventions can affect the domestic interest rate relevant for the consumption-saving decision through the change in the financial system's liquidity condition even when the policy interest rate is held constant. Simulation exercises based on the calibration aiming to capture the Thai economy suggest that the reliance on sterilized FX interventions to deal with capital flows can be welfare-improving, mainly due to liquidity benefits. However, the effect of liquidity-based sterilized FX interventions on the exchange rate dynamics is small. Furthermore, an accommodative interest rate policy appears essential for sterilized FX interventions to be fully effective. Chapter 3 examines the viability of capital controls on inflows following Thailand's experience which experienced a stock market crash in consequence of the introduction of the unremunerated reserve requirement measure in December 2006. Both theoretical analysis and empirical evidence suggest that the predominant factor for the stock market crash was the punitive implicit tax rate that made any new foreign investment in the domestic stock market unprofitable. Occurring as a result of limited foreign participation, a revaluation of systematic risks relevant for idiosyncratic risk pricing as well as a reduction in stocks' liquidity led to a sharp increase in the equity premium. Consequently, share prices declined substantially. The importance of these two channels in triggering the stock market crash was largely supported by the findings that difference in covariances and trading frequency appear as the most important explanatory variables for changes in share prices across firms during the stock market collapse and rebound. In short, capital controls should remain a viable policy option provided that they are well-designed. Chapter 4 illustrates how to apply the methodology developed by Obstfeld and Rogoff (2005) and (2007) to estimate the magnitude of exchange rate fluctuations required for absorbing changes in financial flows in addition to facilitating adjustments of the current account towards its medium-term position, with a particular focus on analyzing Thailand's exchange rate fluctuations in the past two decades. The simulation-based analysis points out that the Thai baht has been heavily influenced by the development of capital flows, and also suggests that some exchange rate misalignments were evident over certain time periods. Specifically, the Thai baht seemed relatively weak during 1999-2001, consistent with the export-led growth model propelled by a competitive exchange rate value, but it then appeared justifiably strong in 2006 when the Bank of Thailand seriously concerned about large and rapid currency appreciation. Nevertheless, the dynamics of the Thai baht over the past year has become more aligned with underlying factors that drive exchange rate movements.

Download or read book Essays on Business Cycles and Monetary Policy in Emerging Economies written by Ruy Eduardo Lama and published by . This book was released on 2005 with total page 282 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on International Transmission and Monetary Policy in Emerging Countries written by Martha Cruz Zuniga and published by . This book was released on 2006 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation investigates two aspects of foreign shocks that affect emerging countries: U.S. monetary shocks and workers' remittances. My attention in particular centers on the macroeconomic impact of these foreign shocks. More specifically, in the first essay (Chapter 2) I analyze the international transmission of U.S. monetary policy to emerging economies distinguishing between a direct transmission process and an augmented international transmission. In the augmented transmission mechanism, U.S. shocks may impact leading countries in different regions, and those countries' reactions then affect smaller countries. In the second essay (Chapter 3) I investigate the effects of monetary policy on stock market returns of emerging countries, distinguishing between the impact of domestic monetary policy and the impact of U.S. monetary actions, the latter is designed to capture the international transmission to stock markets. Finally, in the last essay (Chapter 4), I evaluate the impact of workers' remittances on money in developing countries under a framework where the monetary approach to the balance of payments and currency substitution are used. The empirical analysis in Chapters 2 and 3 is conducted using a sample of countries from Asia and Latin America. Results are extracted from impulse responses derived from vector error correction (VEC) models. The estimation in Chapter 4 relies on panel data and three-stage least squares regressions for a sample of Latin American countries with strong remittance presence. The results presented in this dissertation indicate that emerging economies are impacted by U.S. monetary actions and by workers' remittances. Emerging economies seem to benefit from contractionary monetary policy actions originated in the United States because output in emerging economies shows a positive response. In addition, some evidence of the significance of U.S. monetary actions on stock markets in emerging economies is found. In these countries, stock markets receive a significant influence from domestic and foreign monetary policy actions. In particular, increases in interest rates, which correspond to contractionary monetary policy, reduce stock market returns. With respect to workers' remittances, they exert a negative impact on the money demand in developing economies, which suggests that remittances can be a factor that may accelerate the currency substitution process in these countries.

Download or read book Essays on Labor Dynamics and Monetary Policy in Emerging Economies written by Umidjon Abdullaev and published by . This book was released on 2013 with total page 105 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Monetary Policy in Developing Countries written by Zhandos Ybrayev and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation explores the effects of monetary policy on economic inequality, asset prices and unemployment in developing countries. Emerging market economies are structurally different from advanced economies as they are generally associated with greater financial frictions, underdeveloped financial markets, as well as both a high average level and unequal access to dollarized assets, among others. Thus, the study on the impact of monetary policy in emerging economies requires additional specifications. The first essay investigates the distributional consequences of monetary policy in the context of a small open economy framework. I show that wealthy households (represented by the top ten percent of the income distribution), who are more able to save in foreign currencies, gain in purchasing power of their incomes by hedging against domestic inflation. At the same time, since the poor (represented by the bottom fifty percent of the income distribution) retain larger share of liquid assets denominated in domestic currency, consequently leading them to bear a greater burden of local currency inflation. I also show that contractionary monetary policy is associated with periods of higher income inequality in emerging markets. The second essay presents a comprehensive practical analysis of Kazakhstani city-level housing prices. The key focus is to test whether there is a single, integrated Kazakhstani housing market, and hence to examine potential long-run relationships among the seven city housing prices series for which we have monthly data during the period 2014-2017. We also explore how monetary policy shifts and subsequent exchange rate shocks could affect the system of relative prices. The results obtained suggest that city-level house prices are weakly related across cities in the long run, and the interest rate channel of monetary policy currently is surprisingly weak in Kazakhstan. The third essay discusses a relatively new take on Inflation Targeting as a single-mandate monetary policy, which effectively exposes its many disadvantages. Our discussion first introduces the issues of coordination and conflict between fiscal and monetary policies. Our empirical exercise directly addresses the unemployment outcome of inflation targeting policy compared to other monetary policy settings. Our results show that while IT actually reduced the average inflation rate prior 2008 financial crisis, it has a negative effect on the unemployment rate in the longer term. The paper argues that the aggregate unemployment rate is an optimal social welfare-maximizing goal for central banks and should be used as a natural second target in a typical emerging market economy case.

Download or read book Essays on Inflation Dynamics and Monetary Policy in a Globalized World written by Muhammad Naveed Tahir and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The aim of this thesis is to analyze the impact of globalization on the dynamics of inflation and monetary policy in a globalized world. It consists of three essays.In the first essay we investigate the impact of financial globalization on the behaviour of inflation targeting emerging market economies with respect to exchange rate - Do central banks respond to exchange rate movements or not? We use quarterly data for six emerging market inflation targeting economies from the date of their inflation targeting adoption to 2009 Q4. The chapter uses small open economy new Keynesian model à la Gali and Monacelli (2005), and employs multi-equation GMM technique to investigate the relationship. We find that the response of central bank to the exchange rate in case of Brazil, Chile, Mexico and Thailand is statistically significant while insignificant for Korea and Czech Republic. Theoretically, it should not be so as even under flexible inflation targeting central bank responds to inflation deviation and output gap; we think that the peculiar characteristics of emerging markets, like fear of floating, weak financial system and low level of central bank credibility make exchange rate important for these economies. In the second essay we investigate empirically the relative importance of monetary transmission channels for Brazil, Chile and Korea. This chapter uses monthly data from the inception of inflation targeting regime to 2009 M12. We use a SVAR model incorporating the main monetary transmission channels combined together instead of individual channels in isolation. The empirical results indicate that the exchange rate channel and the share price channel have higher relative importance than the traditional interest rate and credit channel for industrial production. The results are not much different in case of inflation, except for Korea. The high ranking of exchange rate and share price channel is in line with the results by Gudmundsson (2007), which finds that exchange rate channel might have overburdened in the wake of financial globalization.In the third chapter we investigate empirically the role of openness - real and financial - on the inflation dynamics of Brazil, Chile and Korea. The chapter uses monthly data from the inception of inflation targeting regime to the end month of 2009. In this chapter we employ the Generalized Method of Moments (GMM) technique. We use imports to GDP ratio as an indicator for real openness whereas Chinn and Ito index (KAOPEN) and total assets plus total liabilities to GDP ratio form the data set of Lane and Milesi-Ferretti are two proxies for financial openness. The chapter concludes that there exists, generally, a positive relationship between real openness and inflation. However, in case of financial globalization the results are inconclusive as they are sensitive to measurement method of financial globalization.

Download or read book Essays on Financial Intermediation and Monetary Policy in Emerging Market Economies written by Yunsang Kim and published by . This book was released on 2020 with total page 212 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the second chapter, we offer an evaluation of claims by policymakers in the EMEs regarding adverse effects of the capital inflows that resulted from US monetary policy during the Great Recession. Our two-country model with financial frictions allows us to consider the welfare effects of contractionary shocks to capital quality under a passive US monetary policy. We compare these effects to the effects of the same shocks when US monetary policy responds with quantitative easing. We find that emerging-market complaints regarding the real exchange rate and current account are mostly due to the shock itself, and not to the US monetary policy. US monetary policy reacting to the shock brings welfare gains for both the US and the EMEs. The gains for the US are an order of magnitude larger than the welfare gains of the EMEs, reflecting the fact that a capital quality shock that originated in the US damages the US the most.

Download or read book Economic Policies in Developing and Emerging Market Economies written by Shengzu Wang and published by . This book was released on 2008 with total page 118 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Monetary Policy Transmission in an Emerging Market Setting written by Ila Patnaik and published by International Monetary Fund. This book was released on 2011-01-01 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book Three Essays on Monetary Policy and Financial Development written by Xiaodai Xin and published by . This book was released on 2004 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: Both economic growth and stabilization require a well-functioning financial system, which includes the central bank and private financial institutions. This dissertation is comprised of three essays on monetary policy and financial development which are related to the roles of the central bank and private financial institutions. To better stabilize the economy, a central bank needs to formulate an optimal strategy for monetary policy and pursues an appropriate objective (targeting regime). In a forward-looking New Keynesian model with persistent output and inflation, the first essay (chapter 2) evaluates a broad hybrid targeting regime when the central bank operates under discretionary monetary policy. By employing the numerical analysis and comparing the performance of different targeting regimes, I find that the hybrid targeting regime yields a social loss closest to that under the optimal committed policy, generating a better outcome than other policy regimes. The second essay (chapter 3) provides new micro-level evidence for the positive relationship between financial development and economic growth based on a large sample of cross-country firm-level data. By examining an important micro channel through which financial development reduces the costs of external finance to firms, I find that firms that are more externally dependent grow faster in countries with more developed financial systems. The third essay (chapter 4) investigates the impact of external debt on long-term investment and its interaction with domestic financial intermediation in emerging markets. Extending the Ramsey-Cass-Koopmans model to a small open economy with the role of financial intermediation, I find that the overall effect of a high level of external debt on investment depends heavily on the degree of domestic financial intermediation. Using a large sample of panel data on 76 developing countries over the last three decades, the empirical results indicate that when a country's domestic banking sector develops to a certain degree, the high level of external debt facilitates investment.

Download or read book Essays in Macroeconomic Policy written by Miranda S. Goeltom and published by Gramedia Pustaka Utama. This book was released on 2007 with total page 624 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Monetary Policy and Inflation in Developing Countries written by Imran Hussain Shah and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The principal objective of this thesis is to evaluate appropriate measures of inflation which are to be applicable for implementing monetary policy in developing countries. The first essay attempts to assess real effects of high inflation episodes for Indonesia, Malaysia and Pakistan. In order to investigate the real effects of high inflation episodes, the study adopts an indicator for the inflationary real effect, named inflationary real response (IRR), which is the difference between the expected and output-neutral inflation. Both the expected and output-neutral inflation are computed as the decomposition of shocks induced in the vector autoregressive (VAR) model. The main finding of this chapter is that there is a positive real effect in economic growth in the period after high inflation. The second essay investigates the responses of real output and inflation to oil price, aggregate supply and demand shocks in the four Asian developing countries; Indonesia, Malaysia, Pakistan, and Thailand. The structural VAR model is used to identify the different shocks and to explore the relative contributions of these shocks in explaining macroeconomic fluctuations. It is found that oil price shocks have negligible effects on economic activities for all the examined countries. However, aggregate supply and demand shocks are key sources of variation in output and inflation. The final essay examines whether the central bank should target a broader measure of the price index that incorporates stock prices alongside the prices of current goods and services. The primary contribution of this chapter is the estimation of a price index that can be efficiently utilised by central banks aiming to minimise output volatility. The results suggest that the central bank should use a price index that gives a sizeable weight to the fundamental component of stock prices to minimise output gap variance.

Download or read book Inflation in Emerging and Developing Economies written by Jongrim Ha and published by World Bank Publications. This book was released on 2019-02-24 with total page 513 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.