Financial shocks and exchange market pressure

Arbeitspapier

The taper tantrum episode induced a sudden outflow of capital from emerging markets back to the United States. This paper analyzes exchange market pressure in 93 developing and emerging market economies during this episode, drawing on recent methodological improvements in measuring exchange market pressure. We find that all economies in the sample that were integrated with global capital markets were heavily hit. Although popular discourse suggested that the extent of an economy's fragility depended on its macroeconomic fundamentals, we find these fundamentals did not have much of a role in determining the level of pressure on a currency.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ADB Economics Working Paper Series ; No. 581

Classification and Topics

• Classification: Wirtschaft ; Monetary Policy ; Foreign Exchange ; Current Account Adjustment; Short-term Capital Movements
• Subject: capital flows ; exchange market pressure ; financial shock ; international trade and finance ; macroeconomics ; taper tantrum

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Patnaik, Ila ; Pundit, Madhavi
• Event: Veröffentlichung
• (who): Asian Development Bank (ADB)
• (where): Manila
• (when): 2019

Further information

• DOI: doi:10.22617/WPS190161-2
• Handle: http://hdl.handle.net/10419/203422
• Last update: 10.03.2025, 11:43 AM CET