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Unconventional monetary policy, spillovers, and liftoff: implications for Northeast Asia

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  • Noland, Marcus

Abstract

Unconventional monetary policy (UMP) has had predictable effects. How exit plays out is scenario-dependent. Quantitative easing has had the predictable effect of encouraging currency depreciation and some partner countries may have attempted to offset these exchange rate effects. Korea presents a particularly interesting case: it is relatively small and relatively open and integrated, in both trade and financial terms, with the United States and Japan, two practitioners of UMP. Authorities have acted to limit the won’s appreciation primarily against the currency of China, not the US or Japan. Nevertheless, Korea’s policy is a source of tension with the US. Under legislation currently being considered, the currency manipulation issue could potentially interfere with Korean efforts to attract direct investment from the US and create an obstacle to Korea joining the Trans-Pacific Partnership.

Suggested Citation

  • Noland, Marcus, 2015. "Unconventional monetary policy, spillovers, and liftoff: implications for Northeast Asia," MPRA Paper 67984, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:67984
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    File URL: https://mpra.ub.uni-muenchen.de/67984/1/MPRA_paper_67984.pdf
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    References listed on IDEAS

    as
    1. Marcus NOLAND, 2012. "Korea's Growth Performance: Past and Future," Asian Economic Policy Review, Japan Center for Economic Research, vol. 7(1), pages 20-42, June.
    2. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters,in: This Time Is Different: Eight Centuries of Financial Folly Princeton University Press.
    3. Marcus Noland, 2000. "Avoiding the Apocalypse: The Future of the Two Koreas," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 94.
    4. Hangyong LEE & Changyong RHEE, 2012. "Lessons from the 1997 and the 2008 Crises in Korea," Asian Economic Policy Review, Japan Center for Economic Research, vol. 7(1), pages 47-64, June.
    5. Subramanian Arvind & Kessler Martin, 2013. "The Renminbi Bloc is Here: Asia Down, Rest of the World to Go?," Journal of Globalization and Development, De Gruyter, vol. 4(1), pages 49-94, August.
    6. Jiaqian Chen & Tommaso Mancini Griffoli & Ratna Sahay, 2014. "Spillovers from United States Monetary Policy on Emerging Markets; Different This Time?," IMF Working Papers 14/240, International Monetary Fund.
    7. Jeffrey J. Schott, 2015. "Korea and the TPP: The Inevitable Partnership," Policy Briefs PB15-13, Peterson Institute for International Economics.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    unconventional monetary policy; quantitative easing; spillovers; currency manipulation; Korea;

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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