Serie Banca Central, análisis y políticas económicas (artículos)
https://hdl.handle.net/20.500.12580/69
2024-03-28T17:05:13ZThe international financial system after Covid-19
https://hdl.handle.net/20.500.12580/7503
The international financial system after Covid-19
Obstfeld, Maurice
In March of 2020, international markets seized up with a violence unequaled since the Global Financial Crisis (GFC) nearly a dozen
years before. As economies around the world locked down in the face of the potentially deadly but completely novel SARS-CoV-2 virus, stock markets fell, firms and governments scrambled for cash, liquidity strains emerged even in the market for U.S. Treasurys, and capital flows to emerging and developing economies (EMDEs) reversed violently. Once again, the world economy appeared on the brink of collapse—until it was pulled back by monetary and fiscal interventions that outstripped even those of the 2008–2009 Global Financial Crisis.
In March of 2020, international markets seized up with a violence unequaled since the Global Financial Crisis (GFC) nearly a dozen
years before. As economies around the world locked down in the face of the potentially deadly but completely novel SARS-CoV-2 virus, stock markets fell, firms and governments scrambled for cash, liquidity strains emerged even in the market for U.S. Treasurys, and capital flows to emerging and developing economies (EMDEs) reversed violently. Once again, the world economy appeared on the brink of collapse—until it was pulled back by monetary and fiscal interventions that outstripped even those of the 2008–2009 Global Financial Crisis.
Artículo
2023-08-09T00:00:00ZExchange rate puzzles and policies
https://hdl.handle.net/20.500.12580/7504
Exchange rate puzzles and policies
Itskhoki, Oleg; Mukhin, Dmitry
What is the optimal exchange rate policy? Should exchange rates be optimally pegged, managed, or allowed to freely float? What defines a freely floating exchange rate? Do open economies face a trilemma constraint in choosing between inflation and exchange rate stabilization, unlike divine coincidence in a closed economy? These are generally difficult questions, as the exchange rate is neither a policy instrument, nor a direct objective of the policy, but rather an endogenous general-equilibrium variable tied by equilibrium relationships in both goods and financial markets. At the same time, equilibrium exchange rate behavior features a variety of puzzles from the point of view of conventional business-cycle models typically used for policy analysis in open economy.
What is the optimal exchange rate policy? Should exchange rates be optimally pegged, managed, or allowed to freely float? What defines a freely floating exchange rate? Do open economies face a trilemma constraint in choosing between inflation and exchange rate stabilization, unlike divine coincidence in a closed economy? These are generally difficult questions, as the exchange rate is neither a policy instrument, nor a direct objective of the policy, but rather an endogenous general-equilibrium variable tied by equilibrium relationships in both goods and financial markets. At the same time, equilibrium exchange rate behavior features a variety of puzzles from the point of view of conventional business-cycle models typically used for policy analysis in open economy.
Artículo
2023-08-09T00:00:00ZInternational risk spillovers: implications for emerging markets’ monetary policy frameworks with an application to Chile
https://hdl.handle.net/20.500.12580/7505
International risk spillovers: implications for emerging markets’ monetary policy frameworks with an application to Chile
Kalemli-Özcan, Sebnem
Among the factors behind international spillovers, U.S. monetary policy developments retain a major influence. Such developments
drive the global financial cycle as strongly demonstrated by Rey (2013), Miranda-Agrippino and Rey (2020), Miranda-Agrippino and
Rey (2021). The dramatic U.S. monetary easing during the early months of the Covid-19 pandemic was the single most important
factor for the reversal of capital outflows to emerging markets and developing economies.1 As shown by Kalemli-Özcan (2019), the
transmission mechanism for monetary policy spillovers to emerging market economies (EMEs) rests on the effect of U.S. monetary policy on investors’ risk sentiments, as those sentiments are more volatile in the case of EMEs. In Kalemli-Özcan (2019), I show that capital flows to emerging markets are particularly “risk-sensitive.” This creates a challenge unique to the EME policymakers and their monetary policy frameworks.
Among the factors behind international spillovers, U.S. monetary policy developments retain a major influence. Such developments
drive the global financial cycle as strongly demonstrated by Rey (2013), Miranda-Agrippino and Rey (2020), Miranda-Agrippino and
Rey (2021). The dramatic U.S. monetary easing during the early months of the Covid-19 pandemic was the single most important
factor for the reversal of capital outflows to emerging markets and developing economies.1 As shown by Kalemli-Özcan (2019), the
transmission mechanism for monetary policy spillovers to emerging market economies (EMEs) rests on the effect of U.S. monetary policy on investors’ risk sentiments, as those sentiments are more volatile in the case of EMEs. In Kalemli-Özcan (2019), I show that capital flows to emerging markets are particularly “risk-sensitive.” This creates a challenge unique to the EME policymakers and their monetary policy frameworks.
Artículo
2023-08-09T00:00:00ZGlobal drivers and macroeconomic volatility in EMEs: a dynamic-factor, general-equilibrium perspective
https://hdl.handle.net/20.500.12580/7506
Global drivers and macroeconomic volatility in EMEs: a dynamic-factor, general-equilibrium perspective
Bajraj, Gent; Fuentes D., Miguel; García S., Benjamín; Lorca, Jorge; Paillacar, Manuel; Wlasiuk, Juan M.; Fernández, Andrés
A common view held by academics as well as policymakers assigns an important role to global factors as drivers of fluctuations in economic activity in emerging market economies (EMEs). This follows naturally from the fact that these economies are often small and open to trade in global goods and capital markets, which makes them vulnerable to shocks in these markets. However, the nature of these global forces as well as their transmission mechanism into EMEs continues to be debated and is the subject of an active research area in international macroeconomics. While an influential view postulates a financial origin in the form of a global financial cycle (Miranda-Agrippino and Rey, 2020), others have argued in favor of alternative global forces in the form of fluctuations in commodity prices (Fernández and others, 2017, 2018, 2020), changes in sovereign risks (Longstaff and others, 2011; Aguiar and others, 2016), and a common growth factor among EMEs (Claessens and others, 2012).
A common view held by academics as well as policymakers assigns an important role to global factors as drivers of fluctuations in economic activity in emerging market economies (EMEs). This follows naturally from the fact that these economies are often small and open to trade in global goods and capital markets, which makes them vulnerable to shocks in these markets. However, the nature of these global forces as well as their transmission mechanism into EMEs continues to be debated and is the subject of an active research area in international macroeconomics. While an influential view postulates a financial origin in the form of a global financial cycle (Miranda-Agrippino and Rey, 2020), others have argued in favor of alternative global forces in the form of fluctuations in commodity prices (Fernández and others, 2017, 2018, 2020), changes in sovereign risks (Longstaff and others, 2011; Aguiar and others, 2016), and a common growth factor among EMEs (Claessens and others, 2012).
Artículo
2023-08-09T00:00:00Z