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.
A Conceptual Model For The Integrated Policy Framework
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Author : Mr.Suman S Basu
language : en
Publisher: International Monetary Fund
Release Date : 2020-07-07
A Conceptual Model For The Integrated Policy Framework written by Mr.Suman S Basu 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.
In the Mundell-Fleming framework, standard monetary policy and exchange rate flexibility fully insulate economies from shocks. However, that framework abstracts from many real world imperfections, and countries often resort to unconventional policies to cope with shocks, such as COVID-19. This paper develops a model of optimal monetary policy, capital controls, foreign exchange intervention, and macroprudential policy. It incorporates many shocks and allows countries to differ across the currency of trade invoicing, degree of currency mismatches, tightness of external and domestic borrowing constraints, and depth of foreign exchange markets. The analysis maps these shocks and country characteristics to optimal policies, and yields several principles. If an additional instrument becomes available, it should not necessarily be deployed because it may not be the right tool to address the imperfection at hand. The use of a new instrument can lead to more or less use of others as instruments interact in non-trivial ways.
An Estimated Dsge Model For Integrated Policy Analysis
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Author : Kaili Chen
language : en
Publisher: International Monetary Fund
Release Date : 2023-06-30
An Estimated Dsge Model For Integrated Policy Analysis written by Kaili Chen 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 2023-06-30 with Business & Economics categories.
We estimate a New Keynesian small open economy model which allows for foreign exchange (FX) market frictions and a potential role for FX interventions for a large set of emerging market economies (EMEs) and some inflation targeting (IT) advanced economy (AE) countries serving as a control group. Next, we use the estimated model to examine the empirical support for the view that interest rate policy may not be sufficient to stabilize output and inflation following capital outflow shocks, and the extent to which FX interventions (FXI) can improve policy tradeoffs. Our results reveal significant structural differences between AEs and EMEs—in particular FX market depth—leading to different transmission of capital outflow shocks which justifies occasional use of FXI in some EMEs in certain situations. Our analysis also highlights the critical importance of accounting for the endogeneity of FXI behavior when assessing FX market depth and policy tradeoffs associated with volatile capital flows in past episodes.
Philippines
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Author : International Monetary Fund. Asia and Pacific Dept
language : en
Publisher: International Monetary Fund
Release Date : 2023-12-15
Philippines written by International Monetary Fund. Asia and Pacific Dept 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 2023-12-15 with Business & Economics categories.
Philippines: Selected Issues
The Ararat Fiscal Strategy Model A Structural Framework For Fiscal Policy Analysis In Armenia
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Author : Victoria Babajanyan
language : en
Publisher: International Monetary Fund
Release Date : 2022-06-10
The Ararat Fiscal Strategy Model A Structural Framework For Fiscal Policy Analysis In Armenia written by Victoria Babajanyan 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 2022-06-10 with Business & Economics categories.
This paper presents an overview of the Ararat Fiscal Strategy Model (AFSM), which is a structural, New-Keynesian, DSGE, small open economy model with a rich fiscal block that includes several expenditure and revenue instruments, and types of debt. The AFSM is now a formal part of the Ministry of Finance analytical toolkit to do macroeconomic fiscal policy scenario analysis, which feeds into policy discussions, budget planning, and the Medium-Term Expenditure Framework. The model was applied to assses the macroeconomic impact of the “first wave” of the Covid-19 pandemic on the Armenian economy, including the mitigating effects of policy responses. AFSM simulations revealed a potential severe impact in 2020, with declines in GDP and consumption of 12.9 and 11.7 percent, respectively, and a cumulative loss of GDP of 38 percent for the period 2020-2023. They also highlighted a significant fiscal outlook deterioration that would increase public debt-to-GDP ratios by 18.8 percentage points over 2020-23. The package of counter-cyclical fiscal measures of 3.6 percent of GDP, however, was estimated to cushion the 2020 GDP decline by almost 2 percentage points, as well as protect jobs. A second AFSM application related to the 2018 public investment under-execution showed the importance of improving the efficiency of public investment to have positive macroeconomic and fiscal effects.
An Integrated Policy Framework Ipf Diagram For International Economics
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Author : Mr. Suman S Basu
language : en
Publisher: International Monetary Fund
Release Date : 2024-02-23
An Integrated Policy Framework Ipf Diagram For International Economics written by Mr. Suman S Basu 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 2024-02-23 with Business & Economics categories.
The Mundell-Fleming IS-LM approach has guided generations of economists over the past 60 years. But countries have experienced new problems, the international finance literature has advanced, and the composition of the global economy has changed, so the scene is set for an updated approach. We propose an Integrated Policy Framework (IPF) diagram to analyze the use of multiple policy tools as a function of shocks and country characteristics. The underlying model features dominant currency pricing, shallow foreign exchange (FX) markets, and occasionally-binding external and domestic borrowing constraints. Our diagram includes the use of monetary policy, FX intervention, capital controls, and domestic macroprudential measures. It has four panels to explore four key trade-offs related to import consumption, home goods consumption, the housing market, and monetary policy. Our extended diagram adds fiscal policy into the mix.
Exchange Rate Swings And Foreign Currency Intervention
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Author : Andrew Filardo
language : en
Publisher: International Monetary Fund
Release Date : 2022-07-29
Exchange Rate Swings And Foreign Currency Intervention written by Andrew Filardo 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 2022-07-29 with Business & Economics categories.
This paper develops a new approach for exploring the effectiveness of foreign currency intervention, focusing on real exchange cycles. Using band spectrum regression methods, it examines the role of macroeconomic fundamentals in determining the equilibrium real exchange rate at short-, medium-, and low frequencies. Next, it assesses the effectiveness of FX intervention depending on the degree of cycle-specific misalignments for 26 advanced- and emerging market economies, covering the period 1990–2018, and using different techniques to mitigate endogeneity concerns. Evidence supports the hypothesis that central banks can lean effectively against short-run cyclical misalignments of the real exchange rate. The effects are present in quarterly data—i.e., at policy-relevant horizons. The effectiveness of intervention rises with the size of the misalignment, and with the duration of one-sided interventions. FX sales appear to be somewhat more effective than FX purchases, and intervention is less effective in more liquid FX markets.
Republic Of Kazakhstan Selected Issues
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Author : International Monetary
language : en
Publisher: International Monetary Fund
Release Date : 2022-04-11
Republic Of Kazakhstan Selected Issues written by International Monetary 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 2022-04-11 with Business & Economics categories.
Republic of Kazakhstan: Selected Issues