Current Policy Challenges Facing Emerging Markets

July 24-25, 2019

The Central Bank of Chile, the International Monetary Fund and the IMF Economic Review organized a joint conference on the “Current Policy Challenges Facing Emerging Markets". Rising trade barriers, weak commodity prices, the ongoing monetary policy normalization in advanced economies, and the increased volatility of world capital markets create a challenging global environment for emerging markets. These challenges are further complicated by domestic vulnerabilities in the public sector, financial intermediaries and the private sector. Against this background, the conference featured an outstanding set of academic and policy sessions on the key policy challenges facing emerging market economies. The event was hosted by the Central Bank of Chile and will take place in Santiago, Chile on July 24-25, 2019.

Day 1, Wednesday, July 24, 2019

8:00–8:45 a.m.

Registration

8:50–9:00 a.m.

Opening Remarks by Gita Gopinath (Economic Counsellor and Director, Research Department, IMF)

9:00–10:30 a.m.

Policy Panel

Moderator: Gita Gopinath (Economic Counsellor and Director, Research Department, IMF)

Guillermo Calvo (Columbia University)

Kristin Forbes (MIT Sloan School of Management)

Andrea Tokman (Quiñenco S.A.)

Alejandro Werner (IMF)

Watch video

10:30–10:45 a.m.

*** Coffee Break ***

10:45 a.m.–12:45 p.m.

Session 1:  Monetary Policy

Chair: Klaus Schmidt-Hebbel (Universidad del Desarrollo)

 

Optimal Monetary Policy under Dollar Pricing

Authors: Konstantin Egorov (New Economic School) and Dmitry Mukhin (Yale University)

Paper

Discussant: Ricardo Reis (London School of Economics)

***

Interest Rate Uncertainty as a Policy Tool

Authors: Fabio Ghironi (University of Washington) and Galip Kemal Ozhan (Bank of Canada)

Paper

Discussant: Javier García-Cicco (Central Bank of Argentina)

***

Is Inflation Domestic or Global? Evidence from Emerging Markets

Authors: Rudolfs Bems (IMF), Francesca Caselli (IMF), Francesco Grigoli (IMF), and Bertrand Gruss (IMF)

Paper

Discussant: Petra Geraats (University of Cambridge)

12:45–2:00 p.m.

*** Lunch Break ***

2:00–3:30 p.m.

Session 2:  Global Finance and Emerging Markets

Chair: José de Gregorio (University of Chile)


In Search of Distress Risk in Emerging Markets

Authors: Gonzalo Asis (University of North Carolina at Chapel Hill), Anusha Chari (University of North Carolina at Chapel Hill), Adam Haas (University of North Carolina at Chapel Hill)

Paper

Discussant: Stephen Cecchetti (Brandeis International Business School)

***

China’s Impact on Global Financial Markets

Author:  Isha Agarwal (University of British Columbia), Grace Weishi Gu (University of California, Santa Cruz) and Eswar Prasad (Cornell University)

Paper

Discussant: Gian Maria Milesi-Ferretti (IMF)

3:30–3:45 p.m.

*** Coffee Break ***

3:45–5:15 p.m.

Session 3: Trade

Chair: Vittorio Corbo (Private Consultant)

 

Emerging Markets and the New Geography of Trade: The Effects of Rising Trade Barriers

Authors: Ricardo Reyes-Heroles (Federal Reserve Board), Sharon Traiberman (New York University) and Eva van Leemput (Federal Reserve Board)

Paper

Discussant: Sebastian Claro (Pontifical Catholic University of Chile)

***

The Price of Capital Goods: A Driver of Investment Under Threat

Authors: Weicheng Lian (IMF), Natalija Novta (IMF), Evgenia Pugacheva (IMF), Yannick Timmer (IMF) and Petia Topalova (IMF)

Paper

Discussant: Pamela Medina (University of Toronto Scarborough and Rotman School of Management)

 5:30 p.m. Cocktail Reception - Veranda Room, Ritz-Carlton Hotel
Day 2, Thursday, July 25, 2019

10:30–10:45 a.m.

Registration and Coffee

10:45 a.m.–12:45 p.m.

Session 4: Capital Flows

Chair: Enrique Mendoza (University of Pennsylvania)

The Impact of Industrialized Countries' Monetary Policy on Emerging Economies

Authors: Vincenzo Quadrini (USC Marshall School of Business)

Paper

Discussant: David Kohn (Pontifical Catholic University of Chile)

***

Capital Flows at Risk

Authors: Gaston Gelos (IMF), Lucyna Górnicka (IMF), Robin Koepke (IMF), Ratna Sahay (IMF) and Silvia Sgherri (IMF)

Discussant: Luis Felipe Céspedes (Universidad Adolfo Ibáñez)

***

Search for Yield in Large International Corporate Bonds: Investor Behavior and Firm Responses

Authors: Charles W. Calomiris (Columbia Business School), Mauricio Larrain (Pontifical Catholic University of Chile and Comisión para el Mercado Financiero, CMF), Sergio L. Schmukler (World Bank) and Tomas Williams (George Washington University)

Paper

Discussant: Giovanni Dell’Ariccia (IMF)

12:45–2:00 p.m.

*** Lunch Break ***

2:00–3:30 p.m.

Session 5:  Monetary Policy and Foreign Exchange Intervention

Chair: Pablo Garcia (Central Bank of Chile)

 

The Expansionary Lower Bound: Contractionary Monetary Easing and the Trilemma 

Authors: Paolo Cavallino (Bank for International Settlements) and Damiano Sandri (IMF)

Paper

Discussant: Sofia Bauducco (Central Bank of Chile)

***

Emerging Markets Exchange Rate Policies: Stabilizing or Manipulation?

Author: Kathryn M.E. Dominguez (University of Michigan)

Paper

Discussant: Eduardo Levy Yeyati (Universidad Torcuato Di Tella)

3:30–3:45 p.m.

*** Coffee Break ***

3:45–5:15 p.m.

Session 6: Financial Intermediation

Chair: Andrea Repetto (Adolfo Ibáñez University)

Relationship Networks in Banking Around a Sovereign Default and Currency Crisis

Authors: Pablo D’Erasmo (Federal Reserve Bank of Philadelphia), Hernán Moscoso Boedo (University of Cincinnati), María Pía Olivero (Drexel University) and Máximo Sangiacomo (Central Bank of Argentina)

Paper

Discussant: Carlos Urrutia (Instituto Tecnólogico Autónomo de México)

***

From Carry Trades to Trade Credit: Financial Intermediation by Non-Financial Corporations

Authors: Bryan Hardy (Bank for International Settlements) and Felipe Saffie (University of Maryland)

Paper

Discussant: Victoria Nuguer (Inter-American Development Bank)