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Emerging Economy Responses to the Global Financial Crisis of 2007-20+L427209

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  • Etienne B. Yehoue
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    Abstract

    This paper draws on a unique data set on the nontraditional systemic liquidity easing measures recently undertaken by many emerging market economies. It offers an empirical analysis of the key determinants affecting the decision to undertake these measures over the period September 2008-March 2009. The paper finds that economy size, access to international credit markets, CDS spreads, currency depreciation, and current account balances are among the key factors influencing the adoption of these measures. It provides a rationale for the differences in central bank policy responses, which reflect differences in economic structures rather than conflicting views on fundamental principles. The paper also provides a preliminary assessment of the effectiveness of these measures and points out that despite their positive impacts, they have not fully shielded the real economy from the recent financial meltdown.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 09/265.

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    Length: 34
    Date of creation: 01 Dec 2009
    Date of revision:
    Handle: RePEc:imf:imfwpa:09/265

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    Related research

    Keywords: Central bank policy; Emerging markets; Foreign exchange reserves; Global Financial Crisis 2008-2009; Monetary measures; exchange rate; current account; foreign exchange; central bank; external debt; current account balances; central banks; foreign debt; sovereign bond; exchange rate dummy; currency depreciation; exchange reserves; exchange rate regime; exchange rate depreciation; reserve bank; exchange rate volatility; sovereign debt; exchange swaps; debt accumulation; debt data; external financing; exchange restrictions; international debt; liquidity injection; exchange rate policy; exchange arrangements; exchange markets; liquidity injections; external shocks; foreign exchange markets; exchange rate policies; global liquidity; fixed exchange rate; foreign exchange swaps;

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Aizenman, Joshua & Pasricha, Gurnain Kaur, 2010. "Selective swap arrangements and the global financial crisis: Analysis and interpretation," International Review of Economics & Finance, Elsevier, Elsevier, vol. 19(3), pages 353-365, June.
    2. Cukierman, A. & Miller, G.P. & Neyapti, B., 2000. "Central Bank Rerform, Liberalization and Inflation in Transition Economies - an International Perspective," Papers, Tel Aviv 00-19, Tel Aviv.
    3. Naohiko Baba & Robert N McCauley & Srichander Ramaswamy, 2009. "US dollar money market funds and non-US banks," BIS Quarterly Review, Bank for International Settlements, Bank for International Settlements, March.
    4. Peter Stella & Seiichi Shimizu & Simon Gray & Ulrich H. Klueh & Alexandre Chailloux, 2008. "Central Bank Response to the 2007-08 Financial Market Turbulence," IMF Working Papers 08/210, International Monetary Fund.
    5. Mark R. Stone & Etienne B. Yehoue & Kotaro Ishi, 2009. "Unconventional Central Bank Measures for Emerging Economies," IMF Working Papers 09/226, International Monetary Fund.
    6. Mark R. Stone & W. Christopher Walker & Yosuke Yasui, 2009. "From Lombard Street to Avenida Paulista," IMF Working Papers 09/259, International Monetary Fund.
    7. Stephen G. Cecchetti, 2008. "Crisis and Responses: the Federal Reserve and the Financial Crisis of 2007-2008," NBER Working Papers 14134, National Bureau of Economic Research, Inc.
    8. Stephen G. Cecchetti & Piti Disyatat, 2010. "Central bank tools and liquidity shortages," Economic Policy Review, Federal Reserve Bank of New York, Federal Reserve Bank of New York, issue Aug, pages 29-42.
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    Cited by:
    1. Mark R. Stone & Etienne B. Yehoue & Kotaro Ishi, 2009. "Unconventional Central Bank Measures for Emerging Economies," IMF Working Papers 09/226, International Monetary Fund.
    2. Pop, Napoleon & Seitan, Silviu Marius & Beju, Daniela Georgeta & Ivan, Mihail Vincentiu & Iarca, Ion & Fat, Codruta Maria & Filip, Angela Maria & Pochea, Maria Miruna & Muresan Jianu, Daniel & Francu,, 2011. "Monetary Policy Management Within The Post-Crisis Context," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", Centre of Financial and Monetary Research "Victor Slavescu", vol. 15(1), pages 190-209.

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