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 …