This paper provides empirical evidence that the size of the spillovers from U.S. monetarypolicy to non-oil GDP growth in the GCC countries depends on the level of oil prices. Thepotential channels through which oil prices could affect the effectiveness of monetary policyare discussed. We find...

The macroeconomic policy response in India after the North Atlantic financial crisis (NAFC) was rapid. The overshooting of the stimulus and its gradual withdrawal sowed seeds for inflationary and BoP pressures and growth slowdown, then exacerbated by domestic policy bottlenecks and volatility in...

We examine how Korea's capital flows and trade have been affected by the quantitative easing (QE) of the United States and the quantitative and qualitative easing (QQME) of Japan. Korea is an intriguing case due to its borderline position between advanced and emerging market country groups, and...

Three years have passed since the Bank of Japan's asset purchase program was introduced in 2011, causing a sharp decline in the value of the Japanese Yen. What would be the implications for Japan and Korea's exporters if the weak Yen is here to stay? We explore this question by examining...

We study a wide range of hybrid inflation-targeting (IT) and managed exchange rate regimes, analyzing their implications for inflation, output and the exchange rate in the presence of various domestic and external shocks. To this end, we develop an open economy new-Keynesian model featuring...

Policymakers have relied on a wide range of policy tools to cope with capital flow shocks. And yet, the effects and interaction of these policies remain under debate, as does the motivation for using them. In this paper, quantile local projections are used to estimate the entire distribution of...

The paper models an adjustable peg exchange rate arrangement as a policy rule with an escape clause under which the timing and magnitudes of realignments are the outcomes of policy optimization decisions. Under the assumptions that market participants are rational, risk averse, and fully...

There are 13 countries in Central, Eastern and Southeastern Europe (CESEE) with floating exchange rate regimes, de jure. This paper uses the framework pioneered by Frankel and Wei (1994) and extended in Frankel and Wei (2008) to show that most of them have been tracking either the euro or the US...

This paper introduces a theoretical framework for liquidity management under fixed exchange rate arrangement, derived from the price-specie flow mechanism of David Hume. The framework highlights that the risk of short-term money market rates un-anchoring from the uncovered interest rate parity...

We develop an open economy New Keynesian Model with foreign exchange intervention inthe presence of a financial accelerator mechanism. We obtain closed-form solutions for theoptimal interest rate policy and FX intervention under discretionary policy, in the face ofshocks to risk appetite in...