When do flexible exchange rates prevent monetary and financial conditions from spilling over across currencies? We … prolonged episodes of capital inflows and appreciation of the domestic currency, followed by reversals where capital outflows go … shocks to global financial conditions suffice to trigger these dynamics. …

When does the combination of flexible exchange rates and domestic inflation-oriented monetary policy guarantee … goes hand-in-hand with lower domestic interest rates and higher credit growth. When reversed, tighter monetary conditions …