Monetary Transmission of Global Imbalances in Asian Countries

Il Lee and Woon Gyu Choi

No 2010/214, IMF Working Papers from International Monetary Fund

Abstract: The paper explores the linkages between the global and domestic monetary gaps, and estimates the effects of monetary gaps on output growth, inflation, and net saving rates using panel data for 20 Asian countries for 1980-2008. We find a significant pass-through of the global monetary gap to domestic monetary gaps, which in turn affect output growth and inflation, in individual emerging market and developing countries in Asia. Notably, we provide evidence that the global monetary condition is partly responsible for the current account surplus in Asia. We also draw implications for monetary policy coordination for global rebalancing.

Keywords: WP; EMD Asia; monetary policy; global imbalance; monetary transmission; net saving rates; dynamic panel; investment rate; output growth; adv Asia; saving-investment gap; rate regression; Production growth; Inflation; Capital flows; Output gap; Exchange rates; Asia and Pacific; Global (search for similar items in EconPapers)
Pages: 26
Date: 2010-09-01
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Citations: View citations in EconPapers (17)

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