A Quantitative Model For The Integrated Policy Framework
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A Quantitative Model For The Integrated Policy Framework
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Author : Mr.Tobias Adrian
language : en
Publisher: International Monetary Fund
Release Date : 2020-07-07
A Quantitative Model For The Integrated Policy Framework written by Mr.Tobias Adrian and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-07-07 with Business & Economics categories.
Many central banks have relied on a range of policy tools, including foreign exchange intervention (FXI) and capital flow management tools (CFMs), to mitigate the effects of volatile capital flows on their economies. We develop an empirically-oriented New Keynesian model to evaluate and quantify how using multiple policy tools can potentially improve monetary policy tradeoffs. Our model embeds nonlinear balance sheet channels and includes a range of empirically-relevant frictions. We show that FXI and CFMs may improve policy tradeoffs under certain conditions, especially for economies with less well-anchored inflation expectations, substantial foreign currency mismatch, and that are more vulnerable to shocks likely to induce capital outflows and exchange rate pressures.
A Quantitative Model For The Integrated Policy Framework
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Author : Tobias Adrian
language : en
Publisher:
Release Date : 2020
A Quantitative Model For The Integrated Policy Framework written by Tobias Adrian and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
A Quantitative Microfounded Model For The Integrated Policy Framework
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Author : Mr. Tobias Adrian
language : en
Publisher: International Monetary Fund
Release Date : 2021-12-17
A Quantitative Microfounded Model For The Integrated Policy Framework written by Mr. Tobias Adrian and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-12-17 with Business & Economics categories.
We develop a microfounded New Keynesian model to analyze monetary policy and financial stability issues in open economies with financial fragilities and weakly anchored inflation expectations. We show that foreign exchange intervention (FXI) and capital flow management tools (CFMs) can improve monetary policy tradeoffs under some conditions, including by reducing the need for procyclical tightening in response to capital outflow pressures. Moreover, they can be used in a preemptive way to reduce the risk of a “sudden stop” through curbing a buildup in leverage. While these tools can materially improve welfare, mainly by dampening inefficient fluctuations in risk premia, our analysis also highlights potential limitations, including the possibility that their deployment may forestall needed adjustment in the external balance. Finally, our results also emphasize the power of FXIs to provide domestic stimulus in a liquidity trap.
Foreign Exchange Intervention Through The Lens Of The Quantitative Integrated Policy Framework
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Author : David Bartolini
language : en
Publisher: International Monetary Fund
Release Date : 2025-04-16
Foreign Exchange Intervention Through The Lens Of The Quantitative Integrated Policy Framework written by David Bartolini and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2025-04-16 with categories.
In recent years, Albania has experienced a sustained appreciation of the domestic currency. This raises the questions of what factors are driving this appreciation and how to calibrate appropriate policy responses. Drawing on insights provided by the IMF’s integrated policy framework (IPF), this paper examines the case for foreign exchange intervention (FXI) in Albania by estimating an IPF model to quantitatively illustrate relevant policy tradeoffs. While the estimation results confirm the shallow nature of the local FX markets, the appreciation of the lek is found to have been primarily driven by fundamental factors, making conventional interest rate policy an appropriate policy tool. Nevertheless, in certain circumstances where the fundamental lek appreciation is likely to be compounded by non-fundamental shocks, including shifts in foreign investor risk appetite, FXI can serve as an effective complementary tool in alleviating output-inflation tradeoffs.
Lessons From Haiti S Recent Exchange Rate Developments
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Author : Ms. Rina Bhattacharya
language : en
Publisher: International Monetary Fund
Release Date : 2022-11-11
Lessons From Haiti S Recent Exchange Rate Developments written by Ms. Rina Bhattacharya and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022-11-11 with Business & Economics categories.
From August to October 2020, the Haitian authorities were successful at bringing about a sharp appreciation in the gourde/U.S. dollar exchange rate. This paper analyzes the factors behind this appreciation and its spillovers on the economy. It finds that foreign exchange surrender requirements had a statistically significant effect on the nominal exchange rate, while foreign exchange intervention by the central bank did not. Surrender requirements were also found to have raised trading costs and volatility in the foreign exchange market and contributed to the development of a wider parallel nominal exchange rate premium. This appreciation contributed to a decline in headline inflation during the episode while delivering some fuel subsidy-related savings to the government. Remittance-dependent households and exporters saw a drop in their purchasing power, and Haiti’s net external buffers were adversely affected. Following from these findings, the paper offers recommendations on ways to facilitate foreign exchange management and boost external sustainability while contributing to the central bank’s overall policy objectives.
2024 Staff Guidance Note On The Imf S Engagement With Small Developing States
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Author : International Monetary Fund. Strategy, Policy, & Review Department
language : en
Publisher: International Monetary Fund
Release Date : 2024-07-25
2024 Staff Guidance Note On The Imf S Engagement With Small Developing States written by International Monetary Fund. Strategy, Policy, & Review Department and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2024-07-25 with categories.
This guidance note provides operational guidance on the Fund’s engagement with small developing states (SDS). It highlights the unique economic characteristics and constraints facing SDS, notably in a more shock-prone world. Building on advice that applies to the full membership, the note explains how the characteristics of SDS shape Fund surveillance, financial support and program design, capacity development (CD), and collaboration with other institutions and donors. The note updates the previous version that was published in December 2017.
A Medium Scale Dsge Model For The Integrated Policy Framework
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Author : Mr. Tobias Adrian
language : en
Publisher: International Monetary Fund
Release Date : 2022-01-28
A Medium Scale Dsge Model For The Integrated Policy Framework written by Mr. Tobias Adrian and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022-01-28 with Business & Economics categories.
This paper jointly analyzes the optimal conduct of monetary policy, foreign exchange intervention, fiscal policy, macroprudential policy, and capital flow management. This policy analysis is based on an estimated medium-scale dynamic stochastic general equilibrium (DSGE) model of the world economy, featuring a range of nominal and real rigidities, extensive macrofinancial linkages with endogenous risk, and diverse spillover transmission channels. In the pursuit of inflation and output stabilization objectives, it is optimal to adjust all policies in response to domestic and global financial cycle upturns and downturns when feasible—including foreign exchange intervention and capital flow management under some conditions—to widely varying degrees depending on the structural characteristics of the economy. The framework is applied empirically to four small open advanced and emerging market economies.
Shocks And Capital Flows
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Author : Mr. Gaston Gelos
language : en
Publisher: International Monetary Fund
Release Date : 2023-10-27
Shocks And Capital Flows written by Mr. Gaston Gelos and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-10-27 with Business & Economics categories.
The high exposure of open economies to shocks makes them particularly vulnerable to volatile capital flows and advanced economy monetary policy spillovers. How should and do domestic policymakers respond? The traditional answer has been to use flexible exchange rates as a shock absorber. But flexible exchange rates may not offer full insulation when financial markets are imperfect. This book brings together recent empirical studies at the International Monetary Fund (IMF) on the effectiveness of different tools in responding to such shocks. The 18 chapters in this volume provide a rich background to the recently launched Integrated Policy Framework by the IMF. They comprise assessments of countries’ actual use of different tools, as well as in-depth evaluations of their effectiveness and side effects, covering macroprudential policies, monetary policy, foreign-exchange intervention, and capital flow management policies. Many of the studies involve new data and methods to tackle the inherently difficult problems in identifying and comparing the effects of policies under different circumstances. As a result, the volume offers the reader a comprehensive, in-depth coverage of the policy-oriented empirical research that has informed the development of a new way of thinking about open-economy macroeconomics at the IMF.
Asian Monetary Policy Forum The Insights For Central Banking
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Author : Steven J Davis
language : en
Publisher: World Scientific
Release Date : 2021-06-03
Asian Monetary Policy Forum The Insights For Central Banking written by Steven J Davis and has been published by World Scientific this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-06-03 with Business & Economics categories.
The Monetary Authority of Singapore, Asian Bureau of Finance and Economic Research, University of Chicago Booth Business School, and National University of Singapore Business School have organised the Asian Monetary Policy Forum (AMPF) annually since 2014. The Forum brings together eminent academics, policymakers and private sector economists to deliberate pressing monetary policy issues particularly relevant for Asian countries.This volume collects the inaugural speech and commissioned papers from the past Forums from 2014 to 2020. The chapters cover a range of topics that have assumed importance in the global monetary and financial system over the past twenty years. These include the efficacy of traditional monetary policy frameworks amid synchronised global financial flows, the challenges presented by the US dollar dominance, and the optimality of central banks' use of a broader set of policy instruments within an integrated policy framework. Policymakers, practitioners, students and academicians will be able to draw from this volume useful insights to understand these complex policy challenges.
Emerging Markets Prospects And Challenges
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Author : Tryggvi Gudmundsson
language : en
Publisher: International Monetary Fund
Release Date : 2022-02-18
Emerging Markets Prospects And Challenges written by Tryggvi Gudmundsson and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022-02-18 with Business & Economics categories.
This article documents recent developments in emerging markets in the context of the COVID-19 pandemic, assesses their prospects and challenges, and discusses appropriate policy settings for the medium term. It argues that EM policymakers’ ability to grapple with an incomplete and uneven recovery will be constrained by high public debt and uncertain inflation prospects as well as external risks surrounding capital flows and exchange rate developments. The paper also discusses potential impact of a tightening in global financial conditions and appreciation of the US dollar that could be triggered by a general increase in risk aversion or a reassessment of the likely path of US monetary policy.