IDEAS home Printed from https://ideas.repec.org/p/bis/bisblt/71.html
   My bibliography  Save this paper

Fiscal and monetary policy in emerging market economies: what are the risks and policy trade-offs?

Author

Listed:
  • Ana Aguilar
  • Carlos Cantú
  • Rafael Guerra

Abstract

Since 2021, monetary policy has tightened globally in response to the surge in inflation. Fiscal policies have generally remained expansionary, notably as governments put in place subsidies and transfers to insulate households, first from the pandemic and then from higher energy and food prices. Such fiscal support increases governments' funding needs at a time when tighter monetary policies raise the cost of servicing debts. Financial markets may reassess fiscal sustainability, request higher risk premia or reduce their holdings of sovereign bonds. Although such effects could affect both advanced and emerging market economies, the latter have historically been most vulnerable to a rise in the cost of international financing and a weaker exchange rate.

Suggested Citation

  • Ana Aguilar & Carlos Cantú & Rafael Guerra, 2023. "Fiscal and monetary policy in emerging market economies: what are the risks and policy trade-offs?," BIS Bulletins 71, Bank for International Settlements.
    • Handle: RePEc:bis:bisblt:71
    as

    Download full text from publisher

    File URL: https://www.bis.org/publ/bisbull71.pdf
    File Function: Full PDF document
    Download Restriction: no
    File URL: https://www.bis.org/publ/bisbull71.htm
    Download Restriction: no
    ---><---

    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:bis:bisblt:71. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Christian Beslmeisl (email available below). General contact details of provider: https://edirc.repec.org/data/bisssch.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.