{
  "title": "Coping with the Crisis: Policy Options for Emerging Market Countries",
  "publication": "IMF Staff Position Notes, April 23, 2009",
  "sourceUrl": "https://www.imf.org/en/publications/imf-staff-position-notes/issues/2016/12/31/coping-with-the-crisis-policy-options-for-emerging-market-countries-22894",
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  "summary": "This chapter outlines policies to help solve the debt overhang and bring about recovery in both groups of countries. The current financial turmoil is confronting emerging market economies with two shocks: a ‘sudden stop’ of capital inflows resulting from the global deleveraging process, and a collap",
  "sections": [
    {
      "heading": "Overview and context",
      "content": "- Authors: Christopher W. Crowe, Jonathan David Ostry, Jun I Kim, Marcos Chamon, Atish R. Ghosh\n- Publication date: April 23, 2009\n- Core problem: Emerging market economies (EME) face two concurrent shocks:\n  - a ‘sudden stop’ of capital inflows resulting from the global deleveraging process\n  - a collapse in export demand associated with the global slump\n- Objective: Outline policies to solve the debt overhang and bring about recovery across groups of emerging market countries."
    },
    {
      "heading": "Key findings and mechanisms",
      "content": "- Greater official financing is a key ingredient to expand the “policy space” available to EMEs to pursue supportive macroeconomic policies.\n- In countries with large debt overhangs, official financing can help meet the fiscal outlays associated with resolving that overhang.\n- Ensuring an adequate framework to facilitate rapid debt workouts is an important first step.\n- Debt restructuring mechanisms can:\n  - provide greater scope for monetary easing\n  - reduce negative repercussions of exchange rate depreciation on unhedged balance sheets\n- Depending on available fiscal space, expansionary fiscal policy should be deployed to support economic activity."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Expand official financing to EMEs to increase policy space for supportive macroeconomic action.\n- Establish and ensure adequate frameworks for rapid debt workouts and debt restructuring mechanisms.\n- Use debt restructuring to enable more monetary easing without transferring undue balance-sheet risks to the non-financial sector.\n- Deploy expansionary fiscal policy where fiscal space permits to support domestic demand and recovery."
    },
    {
      "heading": "Subjects and keywords (as listed)",
      "content": "- Subjects: Banking, Currencies, Exchange rates, Financial statements, Fiscal policy, Foreign exchange, Money, Public financial management (PFM)\n- Keywords: adverse selection, capital account, Currencies, East Asia, emerging market country, Exchange rates, Financial statements, foreign currency, Global, hard-won gain, output gap, SPN\n\n---\n\n Content in this bundle\n\n- spn0908 - Executive Summary\n  - spn0908 - Executive Summary (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - spn0908 - Executive Summary (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/imf-staff-position-notes/issues/2016/12/31/coping-with-the-crisis-policy-options-for-emerging-market-countries-22894"
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    "Authors: Christopher W. Crowe, Jonathan David Ostry, Jun I Kim, Marcos Chamon, Atish R. Ghosh",
    "Published: April 23, 2009",
    "Series: IMF Staff Position Notes",
    "DOI: https://doi.org/10.5089/9781462323296.004",
    "Authors: Christopher W. Crowe, Jonathan David Ostry, Jun I Kim, Marcos Chamon, Atish R. Ghosh",
    "Publication date: April 23, 2009",
    "Core problem: Emerging market economies (EME) face two concurrent shocks:",
    "Objective: Outline policies to solve the debt overhang and bring about recovery across groups of emerging market countries.",
    "Greater official financing is a key ingredient to expand the “policy space” available to EMEs to pursue supportive macroeconomic policies.",
    "In countries with large debt overhangs, official financing can help meet the fiscal outlays associated with resolving that overhang.",
    "Ensuring an adequate framework to facilitate rapid debt workouts is an important first step.",
    "Debt restructuring mechanisms can:",
    "Depending on available fiscal space, expansionary fiscal policy should be deployed to support economic activity.",
    "Expand official financing to EMEs to increase policy space for supportive macroeconomic action.",
    "Establish and ensure adequate frameworks for rapid debt workouts and debt restructuring mechanisms.",
    "Use debt restructuring to enable more monetary easing without transferring undue balance-sheet risks to the non-financial sector.",
    "Deploy expansionary fiscal policy where fiscal space permits to support domestic demand and recovery.",
    "Subjects: Banking, Currencies, Exchange rates, Financial statements, Fiscal policy, Foreign exchange, Money, Public financial management (PFM)",
    "Keywords: adverse selection, capital account, Currencies, East Asia, emerging market country, Exchange rates, Financial statements, foreign currency, Global, hard-won gain, output gap, SPN",
    "**_spn0908 - Executive Summary**"
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