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Capital Flow Bonanzas and Monetary Policy in Emerging Europe: Responses to the Global Financial Crisis

Author

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  • Jean-Pierre Allegret

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Audrey Allegret-Sallenave

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique, LEAD - Laboratoire d'Économie Appliquée au Développement - UTLN - Université de Toulon)

Abstract

We analyse the conduct of monetary policy in some new member states of the EU and some EU candidates over the period 2000–13. We investigate why monetary policy has been ineffective in insulating domestic liquidity from capital inflows and why some countries from emerging Europe have been especially constrained in responding to the crisis. Our contribution is threefold. First, we show that countries with fixed exchange rate regimes have encountered significant obstacles to conducting monetary policy to cope with large capital inflows and credit booms during the period preceding the financial crisis. Second, we illuminate how pegged countries have been more constrained in responding to the global financial crisis than non-pegged economies. Third, countries with high currency mismatch and financial vulnerabilities seem unable to adopt monetary policy dedicated only to macroeconomic stabilisation

Suggested Citation

  • Jean-Pierre Allegret & Audrey Allegret-Sallenave, 2015. "Capital Flow Bonanzas and Monetary Policy in Emerging Europe: Responses to the Global Financial Crisis," Post-Print hal-01385959, HAL.
    • Handle: RePEc:hal:journl:hal-01385959
    Note: View the original document on HAL open archive server: https://hal.parisnanterre.fr/hal-01385959
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    Cited by:

    1. Houda Rharrabti Zaid, 2015. "Transmission du stress financier de la zone euro aux Pays de l’Europe Centrale et Orientale," EconomiX Working Papers 2015-37, University of Paris Nanterre, EconomiX.
    2. Pucar Emilija Beker & Glavaški Olgica, 2019. "Macroeconomic Еxternal (Im)Balances within the Eurozone: Core Vs Periphery," Economic Themes, Sciendo, vol. 57(3), pages 257-272, September.
    3. Houda Rharrabti, 2015. "Transmission du stress financier de la zone euro aux Pays de l’Europe Centrale et Orientale," Working Papers hal-04141380, HAL.
    4. Jean-Pierre Allegret & Audrey Allegret-Sallenave, 2016. "Intra-European Union Imbalances and Cyclical Position: Does Monetary Policy Matter?," Post-Print hal-01410832, HAL.

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