Unintended Consequences of U. S. Monetary Policy Shocks : Dutch Disease and Capital Flow Measures in Emerging Markets and Developing Economies /

Dutch disease is often referred as a situation in which large and sustained foreign currency inflows lead to a contraction of the tradable sector by giving rise to a real appreciation of the home currency. This paper documents that this syndrome has been witnessed by many emerging markets and develo...

תיאור מלא

מידע ביבליוגרפי
מחבר ראשי: Yepez, Juan
פורמט: כתב-עת
שפה:English
יצא לאור: Washington, D.C. : International Monetary Fund, 2021.
סדרה:IMF Working Papers; Working Paper ; No. 2021/209
נושאים:
גישה מקוונת:Full text available on IMF
LEADER 02614cas a2200301 a 4500
001 AALejournalIMF022369
008 230101c9999 xx r poo 0 0eng d
020 |c 5.00 USD 
020 |z 9781513589749 
022 |a 1018-5941 
040 |a BD-DhAAL  |c BD-DhAAL 
100 1 |a Yepez, Juan. 
245 1 0 |a Unintended Consequences of U. S. Monetary Policy Shocks :   |b Dutch Disease and Capital Flow Measures in Emerging Markets and Developing Economies /  |c Juan Yepez. 
264 1 |a Washington, D.C. :  |b International Monetary Fund,  |c 2021. 
300 |a 1 online resource (32 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a Dutch disease is often referred as a situation in which large and sustained foreign currency inflows lead to a contraction of the tradable sector by giving rise to a real appreciation of the home currency. This paper documents that this syndrome has been witnessed by many emerging markets and developing economies (EMDEs) as a result of surges in capital inflows driven by accommodative U. S. monetary policy. In a sample of 25 EMDEs from 2000-17, U. S. monetary policy shocks coincided with episodes of currency appreciation and a contraction in tradable output in these economies. The paper also shows empirically that the use of capital flow measures (CFMs) has been a common policy response in several EMDEs to U.S. monetary policy shocks. Against this background, the paper presents a two sector small open economy augmented with a learning-by-doing (LBD) mechanism in the tradable sector to rationalize these empirical findings. A welfare analysis provides a rationale for the use of CFMs as a second-best policy when agents do not internalize the LBD externality of costly resource misallocation as a result of greater capital inflows. However, the adequate calibration of CFMs and the quantification of the LBD externality represent important implementation challenges. 
538 |a Mode of access: Internet 
650 7 |a Foreign Exchange  |2 imf 
650 7 |a International Lending and Debt Problems  |2 imf 
650 7 |a Monetary Policy  |2 imf 
650 7 |a Open Economy Macroeconomics  |2 imf 
650 7 |a Resource Booms  |2 imf 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2021/209 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2021/209/001.2021.issue-209-en.xml  |z IMF e-Library