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Shocks and Capital Flows: Policy Responses in a Volatile World

October 27, 2023

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Shocks and Capital Flows: Policy Responses in a Volatile World, (USA: International Monetary Fund, 2023) accessed December 6, 2024

Summary

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.

Subject: Balance of payments, Capital controls, Capital flows, Central Banks, Exchange rates, Financial crises, Financial sector policy and analysis, Foreign exchange, Macroprudential policy, Macroprudential policy instruments

Keywords: Account restrictiveness, Asia and Pacific, Capital controls, Capital flows, Caribbean, Central America, Europe, Exchange rate intervention, Exchange rate policy, Exchange rates, Foreign exchange intervention, FX debt, Global, IT regime, Macroprudential policy, Macroprudential policy instruments, Monetary policy

Publication Details

  • Pages:

    513

  • Volume:

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  • DOI:

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  • Issue:

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  • Series:

    Books

  • Stock No:

    TIPFEUEA

  • ISBN:

    9798400211263

  • ISSN:

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