What Have Emerging Market Central Banks Learned About the International Transmission of Monetary Policy in Recent Years? The Philippine Case

20 Pages Posted: 7 Oct 2014

See all articles by Diwa C. Guinigundo

Diwa C. Guinigundo

Government of the Republic of the Philippines - Monetary Stability Sector

Date Written: August 2014

Abstract

An understanding of the transmission mechanism is essential to the appropriate design and implementation of monetary policy. Central banks must be alert to changes in the structure of the economy because they tend to alter the way in which a monetary policy change is transmitted to the economy. This concern applies as well to the international transmission of policy changes.

This study considers the mechanisms by which changes in policy rates in advanced economies are transmitted to the Philippine economy and finds that the exchange rate, risk-taking in global financial markets and inflation expectations have been significant channels of transmission. Moreover, changes in policy rates abroad have had an indirect influence on the Philippine policy rate, thereby affecting the outlook for Philippine inflation and growth.

Full publication: The Transmission of Unconventional Monetary Policy to the Emerging Markets

Keywords: International monetary policy, monetary policy transmission mechanism, global financial crisis, Philippines

JEL Classification: F42, F65, G15

Suggested Citation

Guinigundo, Diwa C., What Have Emerging Market Central Banks Learned About the International Transmission of Monetary Policy in Recent Years? The Philippine Case (August 2014). BIS Paper No. 78q, Available at SSRN: https://ssrn.com/abstract=2500365

Diwa C. Guinigundo (Contact Author)

Government of the Republic of the Philippines - Monetary Stability Sector

Philippines

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