Monetary Transmission of Global Imbalances in Asian Countries
IMF Working Papers, September 1, 2010
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Bibliographic details
- Authors: Il Houng Lee, Woon Gyu Choi
- Published: September 1, 2010
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781455205455.001
Summary
- Title: Monetary Transmission of Global Imbalances in Asian Countries
- Authors: Il Houng Lee, Woon Gyu Choi
- Publication date: September 1, 2010
- Paper objective: Explores linkages between the global and domestic monetary gaps and estimates effects of monetary gaps on output growth, inflation, and net saving rates.
- Sample and period: panel data for 20 Asian countries for 1980-2008.
Methodology and scope
- Empirical approach: dynamic panel estimation (implied by keywords and summary).
- Key variables analyzed:
- global monetary gap
- domestic monetary gaps
- output growth / Output gap
- inflation / Prices
- net saving rates / saving-investment gap
- exchange rates and capital flows (subject areas referenced)
- Regional focus: individual emerging market and developing countries in Asia.
Key findings
- There is a significant pass-through of the global monetary gap to domestic monetary gaps in the sample of 20 Asian countries for 1980-2008.
- Domestic monetary gaps, in turn, affect:
- output growth
- inflation
- Evidence indicates that the global monetary condition is partly responsible for the current account surplus in Asia.
- The paper links global monetary conditions to net saving rates (net saving rates noted as an outcome variable).
Policy implications and recommendations
- The results draw implications for monetary policy coordination aimed at global rebalancing.
- Suggested policy focus (implied by conclusions): coordination of monetary policies across countries to address spillovers from the global monetary gap to domestic outcomes such as output growth, inflation, and current account balances.