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 …

We introduce external risks, in the form of shocks to the level and volatility of world interest rates, into a small … open economy model subject to the risk of sudden stops—large recessions together with abrupt reversals in capital inflows …| and characterize optimal macroprudential policy in response to these shocks. In the model, collateral constraints create a …

capital markets, monetary independence and pegged exchange rates. The present paper is a natural extension of Escude (A DSGE …

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 …