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Fiscal and Monetary Nexus in Emerging Market Economies: How Does Debt Matter? PDF

43 Pages·2006·0.49609375 MB·English
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by Garima Vasishtha| 2006| 43 pages| 0.49609375| English

About Fiscal and Monetary Nexus in Emerging Market Economies: How Does Debt Matter?

This paper examines two main aspects of the interaction between fiscal and monetary policy in emerging market economies. First, it explores the interest rate-inflation relationship in economies with different levels of external and domestic public debt using panel- and crosssection data. The results show that interest rate-inflation elasticity weakens with debt GDP and external debt GDP. Second, it utilizes high-frequency data from Brazil, Turkey, and Poland to examine how market-determined variables react to economic news. The results suggest that when vulnerabilities are high, budget news has the most significant impact on country spreads and interest rates, and the impact of monetary policy is weakened.

Detailed Information

Author:Garima Vasishtha
Publication Year:2006
ISBN:1283516489
Pages:43
Language:English
File Size:0.49609375
Format:PDF
Price:FREE
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