and emerging economies. To do so, we estimate Taylor-rule type monetary policy reaction functions, relating the local … highlighted in recent work reduces the extent to which local policymakers decide to exploit the monetary autonomy in principle … portfolio debt and bank liabilities on its external balance sheet and when base-country monetary policy is tightened. The …

capital flows management measures are stabilising, leading to lower chances of either large portfolio inflows or outflows. …

spillovers from euro-area shocks to neighboring countries. We find that in response to euro-area shocks, spillovers are not … to the euro - the insulation puzzle. Unconditionally, however, currency volatility is significantly higher for floaters …. A state-of-the-art open-economy model can fit our conditional evidence on lack of insulation, provided monetary policy …

exchange rate so as to facilitate terms of trade adjustment. We show that optimal nominal exchange rate volatility will reflect … these competing objectives. The key determinants of how much the exchange rate should respond to shocks will depend on the …. Quantitatively, we find the optimal exchange rate volatility should be significantly less than would be inferred based solely on …

with those of the rest of the world. We analyse the relative importance of US, country-specific, and global variables as …. Global and national risk indicators perform better in explaining "rest of the world" flows. Moreover, we find that the … correlation between US and rest of the world flows peaks in periods of elevated uncertainty. We interpret our findings as evidence …

How should monetary policy respond to excessive capital inflows that appreciate the currency and widen the external … monetary stance is expansionary if the exchange rate pass-through (ERPT) on import prices is complete, contractionary if … nominal rigidities attenuate ERPT. Excessive capital inflows, however, may lead to currency undervaluation instead of …