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 …

and emerging economies. To do so, we estimate Taylor-rule type monetary policy reaction functions, relating the local … highlighted in recent work reduces the extent to which local policymakers decide to exploit the monetary autonomy in principle … portfolio debt and bank liabilities on its external balance sheet and when base-country monetary policy is tightened. The …