Monetary Transmission of Global Imbalances in Asian Countries
September 1, 2010
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Summary
The paper explores the linkages between the global and domestic monetary gaps, and estimates the effects of monetary gaps on output growth, inflation, and net saving rates using panel data for 20 Asian countries for 1980-2008. We find a significant pass-through of the global monetary gap to domestic monetary gaps, which in turn affect output growth and inflation, in individual emerging market and developing countries in Asia. Notably, we provide evidence that the global monetary condition is partly responsible for the current account surplus in Asia. We also draw implications for monetary policy coordination for global rebalancing.
Subject: Balance of payments, Capital flows, Exchange rates, Foreign exchange, Inflation, Output gap, Prices, Production, Production growth
Keywords: adv Asia, Asia and Pacific, Capital flows, dynamic panel, EMD Asia, Exchange rates, Global, global imbalance, Inflation, investment rate, monetary policy, monetary transmission, net saving rates, Output gap, output growth, Production growth, rate regression, saving-investment gap, WP
Pages:
26
Volume:
2010
DOI:
Issue:
214
Series:
Working Paper No. 2010/214
Stock No:
WPIEA2010214
ISBN:
9781455205455
ISSN:
1018-5941
