Please use this identifier to cite or link to this item: https://www.um.edu.mt/library/oar/handle/123456789/31226
Title: Responses of monetary authorities in emerging economies to international financial crises : what do we really know?
Authors: Allegret, Jean Pierre
Keywords: Global Financial Crisis, 2008-2009
Monetary policy
Economic policy
Economic development
Issue Date: 2012
Publisher: University of Piraeus. International Strategic Management Association
Citation: Allegret, J. P. (2012). Responses of monetary authorities in emerging economies to international financial crises : what do we really know? European Research Studies Journal, 15(3), 3-32.
Abstract: This paper analyses policy options available for emerging economies to cope with the financial crises. A seminal paper on this question has been published by Kaminsky et al. (2005). Their main conclusion was that developing countries exhibit pro-cyclical fiscal and monetary policies, amplifying the destabilizing effects of capital inflows. The global financial crisis of 2008-09 had led to a renewed interest of the analysis concerning economic policies responses in emerging countries to financial crises. A growing number of studies have provided new empirical evidences according to which emerging economies tend to adopt more frequently counter-cyclical policies to face crises. The main purpose of this paper is to survey the literature on policy responses in emerging countries to financial crises. More precisely, we identify what are the main factors explaining the behavior of monetary policy during financial crises. Two main lessons can be drawn. On the one hand, initial conditions matter. In other words, the ability to face financial crises depends on pre-crisis vulnerabilities. On the other hand, the currency mismatch appears as one of the main impediments to conduct countercyclical monetary policies.
URI: https://www.um.edu.mt/library/oar//handle/123456789/31226
Appears in Collections:European Research Studies Journal, Volume 15, Issue 3

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