Examining the asymmetric monetary policy response to foreign exchange market conditions in emerging and developing economies

Keefe, Helena Glebocki; Shadmani, Hedieh

doi:10.1007/s10368-020-00460-8

Cited by 3 publications

(3 citation statements)

References 29 publications

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“…While purchase intervention shows a negative effect in Philippines and Thailand, they show a positive effect in Colombia, Hungary, and South Africa. The statistical significant and positive coefficients of purchase intervention, which is likely to realize a depreciation, is in line with the finding of Keefe and Shadmani (2020) that find strong response of monetary policy during periods of depreciations. In other countries, purchase intervention shows an insignificant effect on monetary policy.…”

Section: Asymmetric Effect Of Foreign Exchange Interventionsupporting

confidence: 85%

Monetary policy

Bui

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Monetary policy is a crucial tool used by most, not to say all, central banks to finetune macroeconomic conditions. However, empirical evidence regarding its effectiveness is mixed and based on the premise that monetary policy is appropriately measured and identified. Compared with the vast literature for advanced economies, studies investigating the problem of the indicator and identification of monetary policy are limited in emerging economies. ACKNOWLEDGEMENTI would like to thank my wife and family for their support and continuous care throughout my study in Hungary. Also, I would like to express my gratitude and appreciation to the supervisor -Dr Habil. Kiss Gabor David -and other colleagues for their guidance, comments, and corrections. Their contributions are of importance to complete the thesis.Moreover, I would like to show my appreciation to the Doctoral School of Economics of the University of Szeged, the Stipendium Hungaricum for their support during my study.Finally, I am grateful for precious comments of reviewers.

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Section: Asymmetric Effect Of Foreign Exchange Interventionsupporting

confidence: 85%

Monetary policy

Bui

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“…Some economists argue that there are situations in which exchange rate volatility can have both negative and positive effects on trade volume (Keefe & Shadmani, 2020). That being said, the idea is that domination of income effects over substitution effects can lead to a positive relationship between trade and exchange rate volatility (Orzan et al, 2020).…”

Section: The Impact Of Exchange Rate Volatility On Trade In Emerging ...mentioning

confidence: 99%

Consequences of choosing the exchange rate regime on International trade

Pargaru,

Andra,

Vasilescu

et al. 2022

30 Years of Economic Reforms in the Republic of Moldova: Economic Progress via Innovation and Competitiveness, Vol II

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In the context of significant global economic turmoil and increasing financial, political and social risks leading to a decrease in aggregate demand worldwide and beyond, external competitiveness becomes a key variable in terms of the resumption of economic growth in Romania as integrated process in the aggregate evolution of the European economy. This paper aims to analyze the link between the exchange rate regime and international trade, in order to demonstrate whether there is an influence of the choice of exchange rate regime on the volume of trade. It also analyzes the influence of exchange rate volatility on international trade. The objectives of this research were: knowing the options for choosing an exchange rate regime; distinguishing the factors that determine the choice of an exchange rate regime; understanding the theories presented on exchange rate regimes; analysis of the impact of choosing an exchange rate regime in the countries of Central and South-Eastern Europe All data used in the paper were collected from articles, reports, summaries, statistics, books, but also official sites such as the International Monetary Fund or the Eurostat website. The data used were selected after deepening and understanding the ideas underlying the choice and influences of exchange rate regimes.

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“…The objective of this study is to test whether the monetary-policy response differs during periods of above-threshold versus below-threshold exchange rate volatility. Previous research in the area of asymmetric monetary policy has relied on regime-switching threshold regression models, such as the two-parameter and two-sample regression analysis (Benlialper, Cömert, & Öcal, 2017;Keefe & Shadmani, 2020). The use of the dynamic panel threshold regression analysis provides an innovative approach to understanding the impact of exchange rate volatility on the monetary policy response of policymakers for three reasons.…”

Section: Modelmentioning

confidence: 99%

The impact of exchange rate volatility on inflation targeting monetary policy in emerging and advanced economies

Keefe

2020

International Finance

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Exchange rate volatility is a stated concern for policymakers in many emerging market economies. This paper investigates whether exchange rate volatility impacts the commitment to inflation targeting monetary policy by analyzing thirteen emerging market economies and nine advanced economies from 2000 to 2016. Using a dynamic panel threshold regression model, the response of the domestic target interest rate to the inflation gap, output gap, and exchange rate condition is tested in scenarios of above‐threshold and below‐threshold exchange rate volatility. Both emerging and advanced economies adhere to their inflation targeting commitments when exchange rate volatility is below 1%, but are unable or unwilling to respond to deviations in the inflation gap when volatility is beyond this threshold value.

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Examining the asymmetric monetary policy response to foreign exchange market conditions in emerging and developing economies

Cited by 3 publications

References 29 publications

Monetary policy

Monetary policy

Consequences of choosing the exchange rate regime on International trade

The impact of exchange rate volatility on inflation targeting monetary policy in emerging and advanced economies

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