IDEAS home Printed from https://ideas.repec.org/a/fip/fedfel/00100.html

Fed policy liftoff and emerging markets

Author

Listed:
  • Julia Bevilaqua
  • Fernanda Nechio

Abstract

Following reports in 2015 that the Federal Reserve would likely begin to raise the short-term policy interest rate?after seven years of near-zero levels?net capital outflows from emerging economies intensified. Many of these countries also experienced large currency depreciations. These developments were similar to those following reports in 2013 about the possible tapering of the Fed?s asset purchases. Furthermore, in both episodes, financial market reactions varied across these developing economies according to each country?s own economic situation.

Suggested Citation

  • Julia Bevilaqua & Fernanda Nechio, 2016. "Fed policy liftoff and emerging markets," FRBSF Economic Letter, Federal Reserve Bank of San Francisco.
    • Handle: RePEc:fip:fedfel:00100
    as

    Download full text from publisher

    File URL: http://www.frbsf.org/economic-research/files/el2016-22.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Edwards, Sebastian, 2007. "Capital controls, capital flow contractions, and macroeconomic vulnerability," Journal of International Money and Finance, Elsevier, vol. 26(5), pages 814-840, September.
    2. Eichengreen, Barry & Gupta, Poonam, 2015. "Tapering talk: The impact of expectations of reduced Federal Reserve security purchases on emerging markets," Emerging Markets Review, Elsevier, vol. 25(C), pages 1-15.
    3. Forbes, Kristin J. & Warnock, Francis E., 2012. "Capital flow waves: Surges, stops, flight, and retrenchment," Journal of International Economics, Elsevier, vol. 88(2), pages 235-251.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jon Frost & Hiro Ito & René van Stralen, 2020. "The effectiveness of macroprudential policies and capital controls against volatile capital inflows," Working Papers 686, DNB.
    2. Norring, Anni, 2022. "Taming the tides of capital: Review of capital controls and macroprudential policy in emerging economies," BoF Economics Review 1/2022, Bank of Finland.
    3. Alberola, Enrique & Erce, Aitor & Serena, José Maria, 2016. "International reserves and gross capital flows dynamics," Journal of International Money and Finance, Elsevier, vol. 60(C), pages 151-171.
    4. Linda S. Goldberg & Signe Krogstrup, 2018. "International Capital Flow Pressures," NBER Working Papers 24286, National Bureau of Economic Research, Inc.
    5. Fabiani, Josefina & Fidora, Michael & Setzer, Ralph & Westphal, Andreas & Zorell, Nico, 2021. "Sudden stops and asset purchase programmes in the euro area," Working Paper Series 2597, European Central Bank.
    6. Amstad, Marlene & Remolona, Eli & Shek, Jimmy, 2016. "How do global investors differentiate between sovereign risks? The new normal versus the old," Journal of International Money and Finance, Elsevier, vol. 66(C), pages 32-48.
    7. Margaux MacDonald & Michał Ksawery Popiel, 2020. "Unconventional Monetary Policy in a Small Open Economy," Open Economies Review, Springer, vol. 31(5), pages 1061-1115, November.
    8. Albertazzi, Ugo & Barbiero, Francesca & Marqués-Ibáñez, David & Popov, Alexander & Rodriguez d’Acri, Costanza & Vlassopoulos, Thomas, 2020. "Monetary policy and bank stability: the analytical toolbox reviewed," Working Paper Series 2377, European Central Bank.
    9. Anaya, Pablo & Hachula, Michael & Offermanns, Christian J., 2017. "Spillovers of U.S. unconventional monetary policy to emerging markets: The role of capital flows," Journal of International Money and Finance, Elsevier, vol. 73(PB), pages 275-295.
    10. M Belén Salas & David Alaminos & Manuel Angel Fernández & Francisco López-Valverde, 2020. "A global prediction model for sudden stops of capital flows using decision trees," PLOS ONE, Public Library of Science, vol. 15(2), pages 1-22, February.
    11. Aizenman, Joshua & Chinn, Menzie D. & Ito, Hiro, 2016. "Monetary policy spillovers and the trilemma in the new normal: Periphery country sensitivity to core country conditions," Journal of International Money and Finance, Elsevier, vol. 68(C), pages 298-330.
    12. Andrea Fabiani & Martha López Piñeros & José-Luis Peydró & Paul E. Soto, 2021. "Capital controls, corporate debt and real effects," Economics Working Papers 1833, Department of Economics and Business, Universitat Pompeu Fabra.
    13. Anusha Chari & Karlye Dilts Stedman & Christian Lundblad, 2017. "Taper Tantrums: QE, its Aftermath and Emerging Market Capital Flows," NBER Working Papers 23474, National Bureau of Economic Research, Inc.
    14. Szabó, Zsolt, 2014. "A Fed szigorodó monetáris politikájának hatása az eszközárakra a feltörekvő piacokon [The effect of incipient tapering on asset prices in emerging markets]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 693-718.
    15. De,Supriyo & Mohapatra,Sanket & Ratha,Dilip K., 2020. "Sovereign Credit Ratings, Relative Risk Ratings, and Private Capital Flows," Policy Research Working Paper Series 9401, The World Bank.
    16. Yongseok Choi & Levan Efremidze & Ozan Sula & Thomas D. Willett, 2025. "Which Capital Flow Surge Methods Are Better at Predicting Reversals and Sudden Stops?: Balancing Type 1 and Type 2 Errors," Open Economies Review, Springer, vol. 36(3), pages 781-824, July.
    17. Andrea Fabiani & Martha López & José-Luis Peydró & Paul E. Soto, 2023. "Capital Controls, Corporate Debt and Real Effects: Evidence from Boom and Crisis Times," Borradores de Economia 1244, Banco de la Republica de Colombia.
    18. Tiago Araújo & Óscar Afonso & Pedro Cunha Neves & Elena Sochirca, 2025. "International spillovers of unconventional monetary policy: A meta-analysis," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 24(2), pages 205-224, May.
    19. Georgiadis, Georgios, 2016. "Determinants of global spillovers from US monetary policy," Journal of International Money and Finance, Elsevier, vol. 67(C), pages 41-61.
    20. Miguel Sarmiento-Paipilla & Nathali Cardozo-Alvarado & Fredy Gamboa-Estrada & Javier G�mez-Pineda & Carlos Le�n-Rinc�n & Javier Migu�lez-M�rquez & Jair Ojeda-Joya, 2023. "Ciclo financiero global, flujos de capital y respuestas de política," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, issue 104, pages 1-55, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedfel:00100. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Federal Reserve Bank of San Francisco Research Library (email available below). General contact details of provider: https://edirc.repec.org/data/frbsfus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.