Several emerging economies have, until recently, experienced large government surpluses and accelerating foreign exchange reserve accumulation. This has been accompanied by economic booms, exchange rate appreciations and in some cases increases in domestic inflation. We show that one way to...

The growing integration of capital markets has strengthened incentives for greater international coordination of economic and financial policies. Structural changes in these financial market, however, may have undermined the effectiveness of monetary and fiscal policy and complicated market...