During the second half of the 2000s, the world experienced a rapid and substantial rise in commodity prices. This shock posed complex challenges for monetary policy, in particular because of the significant increase in food and energy prices, and the repercussions they had on aggregate inflation...

This article discusses the global adjustment process and the current challenges for policymaking, with a special focus on the asymmetries and their implications for economic policy. It reviews the uneven recovery faced by developed and emerging economies. Emphasis is made on the situation of...

It was not until the recent global crisis that financial stability was recognized as a central objective of central banks among advanced economies. However, the concerns for financial stability in emerging markets economies are much more long dated, and come from repeated experiences dealing...

In 2009, the world is facing the worst recession in more than six decades. Chile has been no exception. In spite of this outlook, the Chilean economy stands on solid ground, and recent figures show that the recovery has started. This article discusses the fundamentals of the Chilean economy and...

Why has the economy of Latin America responded more positively than Asia, Europe or the United States after being hit by the recent global financial crisis? Three years after the worst of the crisis, Latin America's GDP is 25 percent higher than its precrisis level. José De Gregorio, Governor...

The welfare effects of mitigating the costs of inflation are examined. In a model where money reduces transactions costs, a fall in inflation costs is equivalent to financial innovation. This can be caused by paying interest on deposits, indexing money, or "dollarizing." Results indicate that...

This paper compares the experience of growth performance and macroeconomic adjustment between East Asia and Latin America from 1970 to 2000. We find that the difference in growth performance between two regions can largely be attributed to the differences in fundamental growth factors such as...

Financial globalization has made monetary policy formulation in emerging market economies increasingly complicated. This timely set of studies looks at the turmoil in global financial markets, which coupled with volatile inflation poses serious challenges for central banks in these countries....