In this paper we show how interbank market frictions can play an important role in propagating and enhancing the effects of shocks in a currency union, and discuss the efficacy of two unconventional policy measures; multi-period central bank refinance operations and large scale asset purchases....

We examine the open-economy implications of the introduction of a central bank digital currency (CBDC). We add a CBDC to the menu of monetary assets available in a standard two-country DSGE model with financial frictions and consider a broad set of alternative technical features in CBDC design....

As a bank-based economy, global factors affect financial intermediation and monetary transmission in Indonesia mainly through financial markets. Foreign portfolio flows to Indonesia are mostly in the form of government bonds and corporate equities, and thus directly influence the movements of...

This paper deals with the relationship between exchange rates and monetary policy in small open economies. I also discuss the connection between policy rates in small countries and in major advanced economies. A main point is that central bankers need to know whether the currency is...

Is the average impact of US short term rates on EM monetary policy independent of the direction of US monetary policy movement? Building on a variety of estimation techniques, we evaluate the relationship between US short term rates and EM monetary policy under alternative US monetary cycles. We...