Arbeitspapier

Monetary policy in the aftermath of currency crisis: the case of Asia

This paper evaluates monetary policy and its relationship with the exchange rate in the five Asian crisis countries. The findings are compared to previous currency crises in recent history. The paper finds that there is no evidence of overly tight monetary policy in the Asian crisis countries in 1997 and early 1998. There is also no evidence that high interest rates led to weaker exchange rates. The usual trade-off between inflation and output when raising interest rates suggested the need for a softer monetary policy in the crisis countries to combat recession. However, in some countries, corporate balance sheet considerations suggested the need to reverse overly depreciated currencies through firmer monetary policy.

Language
Englisch

Bibliographic citation
Series: Texto para discussão ; No. 399

Classification
Wirtschaft
Financial Markets and the Macroeconomy
Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

Event
Geistige Schöpfung
(who)
Goldfajn, Ilan
Baig, Taimur
Event
Veröffentlichung
(who)
Pontifícia Universidade Católica do Rio de Janeiro (PUC-Rio), Departamento de Economia
(where)
Rio de Janeiro
(when)
1999

Handle
Last update
10.03.2025, 11:41 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Goldfajn, Ilan
  • Baig, Taimur
  • Pontifícia Universidade Católica do Rio de Janeiro (PUC-Rio), Departamento de Economia

Time of origin

  • 1999

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