How Does U.S. Monetary Policy Influence Economic Conditions in Emerging Markets?
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
This paper quantifies the economic impact of changes in U.S. monetary policy on emerging market countries. We explore empirically how country risk, as proxied by sovereign bond spreads, is influenced by U.S. monetary policy, country-specific fundamentals, and conditions in global capital markets. In addition, we simulate the direct effects of a tightening in U.S. monetary policy on economic conditions in developing countries. While country-specific fundamentals are important in explaining fluctuations in country risk, the stance and predictability of U.S. monetary policy are also important for stabilizing capital flows and capital market conditions and fostering economic growth in developing countries.
Series:
Working Paper No. 2000/148
Subject:
Debt service ratios Emerging and frontier financial markets External debt Financial institutions Financial markets Public debt Sovereign bonds Treasury bills and bonds
English
Publication Date:
August 1, 2000
ISBN/ISSN:
9781451856811/1018-5941
Stock No:
WPIEA1482000
Pages:
28
Please address any questions about this title to publications@imf.org