polices are tools complementary to the monetary policy rate that can largely reduce inflation and output volatility in a … scenario of capital outflows. Second, the optimal policy mix depends on the underlying shock driving capital flows. FXI takes … the leading role in response to foreign interest rate shocks, while macroprudential policy becomes the prominent tool for …

Policymakers have relied on a wide range of policy tools to cope with capital flow shocks. And yet, the effects and … projections are used to estimate the entire distribution of future policy responses to portfolio flow shocks for 20 emerging …) policy responses to capital flow shocks are heterogeneous across countries, fat-tailed-'extreme' responses tend to be more …

The volatility of capital flows to emerging markets continues to pose challenges to policymakers. In this paper, we … dampening sharp capital flow movements in response to global shocks? What are the near- versus medium-term trade-offs of …

external pressures. With monetary policy independence constrained by this sensitivity, many NREs have utilized other policy … instruments. This paper confirms the vulnerability of NREs to external shocks and finds that in some circumstances managing such … shocks with multiple instruments can both lessen the policy response required from any one policy tool to financial and …

, we show that countries' monetary and exchange rate policies can also be successfully deployed. Overall, our results have …

We develop a microfounded New Keynesian model to analyze monetary policy and financial stability issues in open …) and capital flow management tools (CFMs) can improve monetary policy tradeoffs under some conditions, including by …

monetary policy to respond more countercyclically to global financial shocks. This could be an important channel through which …We show that macroprudential regulation can considerably dampen the impact of global financial shocks on emerging … flow shocks. A broad set of macroprudential tools contribute to this result, including measures targeting bank capital and …

This paper borrows the tradition of estimating policy reaction functions from monetary policy literature to ask whether …

grounded in theory and makes use of previously unexplored variation in the data. We demonstrate how our theory …-country evidence as we find very few robust relationships between capital account restrictiveness and various types of capital inflows …