This paper examines the implications of different types of interest rate shocks in the United States for emerging market and developing economies (EMDEs). It first classifies changes in U.S. interest rates into those caused by changes in inflation expectations ("inflation" shocks), changes in...

In this paper, we examine the prospects for, and implications of, the dollar's continued pivotal role in the international financial system. We find, first, that the dollar remains dominant by a wide margin and will likely retain its dominance for the foreseeable future-none of the other...

This note develops an econometric model of inflation dynamics to assess recent developments. We find that most of the rapid decline in price pressures achieved in 2023 owes to the normalization of supply chains. With supply-chain disruptions now largely resolved, future progress toward...

The electoral campaign of Argentina's new president Javier Milei has revived the debate over the pros and cons of dollarization. Critics argue that dollarizing would force Argentina to import the monetary policy of the Federal Reserve, regardless of whether the Fed's policies are appropriate for...

Among the various explanations for the run-up in oil prices that occurred through mid-2008, one story focuses on the role of monetary policy in the United States and in developing economies. In this view, developing countries that peg their currencies to the dollar were forced to ease their...

In the past decade, some observers have noted an unusual aspect of the Mexican peso's behavior: During periods when the U.S. dollar has risen (fallen) against other major currencies such as the euro, the peso has risen (fallen) against the dollar. Very few other currencies display this behavior....

Among the various explanations for the runup in oil and commodity prices of recent years, one story focuses on the role of monetary policy in the United States and in developing economies. In this view, developing countries that peg their currencies to the dollar were forced to ease their...

The "global saving glut" (GSG) hypothesis argues that the surge in capital inflows from emerging market economies to the United States led to significant declines in long-term interest rates in the United States and other industrial economies. In turn, these lower interest rates, when combined...