Modeling with Macro-Financial Linkages : Credit and Policy Shocks in Emerging Markets

Journal Issue

Volume/Issue:: 2009/123
Series:: IMF Working Papers
Author(s):: Jaromir Benes, Inci Ötker, and David Vávra
Publisher:: INTERNATIONAL MONETARY FUND
Published Date:: June 2009
DOI:: http://dx.doi.org/10.5089/9781451872705.001
ISBN:: 9781451872705
ISSN:: 1018-5941
Page:: 34

This paper develops a stylized, small, open economy macro model that incorporates an explicit and non-trivial role for financial intermediation. It illustrates how such a model could be used for policy analysis in an emerging market economy where policymakers are concerned about risks associated with rapid credit growth, financial dollarization, and foreign borrowing, while lacking traditional tools to effect monetary policy transmission, and hence could resort to more direct instruments, such as foreign exchange market intervention and regulatory and administrative measures. Calibrating the model to a stylized emerging European economy, the paper simulates real and financial sector implications of various external and policy-related shocks that could be used as input for monetary policy making.

Modeling with Macro-Financial Linkages - Credit and Policy Shocks in Emerging Markets

Modeling with Macro-Financial Linkages - Credit and Policy Shocks in Emerging Markets

Article

Modeling with Macro-Financial Linkages

Author(s):: Jaromir Benes, Inci Ötker, and David Vávra
Published Date:: June 2009

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Modeling with Macro-Financial Linkages : Credit and Policy Shocks in Emerging Markets

Modeling with Macro-Financial Linkages

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