The International Transmission of Monetary Policy: Korea's Experience
14 Pages Posted: 7 Oct 2014
Date Written: August 2014
Abstract
Monetary policy shifts in advanced economies are transmitted to emerging market economies (EMEs) through monetary policy responses by EME central banks and changes in cross-border capital flows. The ripple effects, however, depend upon the EMEs’ macroeconomic fundamentals and the amount and composition of the portfolio investment funds that have already flowed into them. Since the 2008 global financial crisis, Korea, like other EMEs, has been influenced, directly and indirectly, by the quantitative easing (QE) and quantitative easing tapering (QET) of major advanced economies. This paper discusses the international transmission effects occurring during the transformation to QE and QET, the related monetary policy responses and the challenges ahead, with a focus mainly on Korea’s experience.
Full publication: The Transmission of Unconventional Monetary Policy to the Emerging Markets
Keywords: Financial spillovers, capital flows, long-term interest rates, monetary policy challenges
JEL Classification: E52, F41
Suggested Citation: Suggested Citation
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