With Global Financial Markets, How Much Control Do Countries Have Over Economic Policies?

2019-03-25T18:06:11-04:00April 6, 2017|

By Selim Ali Elekdag and Gaston Gelos

Versions in عربي (Arabic), Français (French), Русский (Russian), and Español (Spanish)

The outlook for further interest-rate increases by the US Federal Reserve revives interest in a compelling question: In an increasingly integrated global financial system, how much control do countries outside of the US retain over their economic policies?

  […]

How to Manage the Commodity Roller Coaster

2019-03-27T14:51:53-04:00October 7, 2015|

Vitor Gasparby Vitor Gaspar 

(Versions: عربي中文FrançaisРусский, and Español)

The world economy is experiencing important transitions and associated uncertainties.

  • Commodity prices have fallen sharply, with adverse consequences for exporting countries.
  • China’s rebalancing and the prospect of U.S. interest rate increases are having important and costly spillover effects on other economies.
  • And these and other factors are posing important fiscal challenges, especially for emerging markets.

[…]

A Watershed Moment for Latin America: Nine Takeaways from our High-Level Conference

2019-03-27T16:11:04-04:00June 5, 2015|

Alejandro WernerBy Alejandro Werner

(Versions in Español and Português)

Latin America has reached a critical moment. So much better off than two decades ago, and still facing deep-seated problems that get in the way of sustained strong growth and economic development. To better understand these problems from countries’ perspectives, and explore ways the IMF and others can help address them, we brought together experts from the region and beyond—central bankers, finance ministers, and academics—for a high-level conference in Washington, D.C. earlier this week.

Under the […]

Taper Tantrum or Tedium: How U.S. Interest Rates Affect Financial Markets in Emerging Economies

2017-04-14T01:59:52-04:00May 22, 2014|

By Alexander Klemm, Andre Meier, and Sebastián Sosa

(Version in Español)

Governments in most emerging economies, including in Latin America, have reduced their exposure to U.S. interest rates over the past decade, by issuing a greater share of public debt in domestic currencies.

Even so, sudden changes in U.S. interest rates still have the power to roil financial markets in emerging economies. Witness last year’s “taper tantrum”—when the Fed hinted at the possibility of tapering its bond purchases sooner than previously expected, causing bond yields to rise sharply. […]

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