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This paper estimates the impact of foreign participation in determining long-term local currency government bond yields and volatility in a group of emerging markets from 2000-2009. The results of a panel data analysis of 10 emerging markets show that greater foreign participation in the domestic government bond market tends to significantly reduce long-term government yields. Moreover, greater foreign participation does not necessarily result in increased volatility in bond yields in emerging markets and, in fact, could even dampen volatility in some instances.

Banks and Banking --- Finance: General --- Investments: Bonds --- Money and Monetary Policy --- Financial Markets and the Macroeconomy --- General Financial Markets: Government Policy and Regulation --- Debt --- Debt Management --- Sovereign Debt --- Economic Development: Financial Markets --- Saving and Capital Investment --- Corporate Finance and Governance --- General Financial Markets: General (includes Measurement and Data) --- Interest Rates: Determination, Term Structure, and Effects --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Investment & securities --- Finance --- Monetary economics --- Bond yields --- Sovereign bonds --- Securities markets --- Yield curve --- Currencies --- Financial institutions --- Financial markets --- Financial services --- Money --- Bonds --- Capital market --- Interest rates --- Turkey

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This paper evaluates monetary policy-tradeoffs in low-income countries using a dynamic stochastic general equilibrium (DSGE) model estimated on data for Mozambique taking into account the sources of major exogenous shocks, and level of financial development. To our knowledge this is a first attempt at estimating a DSGE model for Sub-Saharan Africa excluding South Africa. Our simulations suggests that a exchange rate peg is significantly less successful than inflation targeting at stabilizing the real economy due to higher interest rate volatility, as in the literature for industrial countries and emerging markets.

Banks and Banking --- Foreign Exchange --- Inflation --- Money and Monetary Policy --- Monetary Policy --- Price Level --- Deflation --- Central Banks and Their Policies --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Monetary economics --- Macroeconomics --- Currency --- Foreign exchange --- Banking --- Inflation targeting --- Exchange rates --- Open market operations --- Monetary base --- Monetary policy --- Prices --- Money supply --- Mozambique, Republic of

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The first part of the book examines the evolution of monetary policy and prudential frameworks of the ASEAN­5, with particular focus on changes since the Asian financial crisis and the more recent period of unconventional monetary policy in advanced economies. The second part of the book looks at policy responses to global financial spillovers. The third and last part of the book elaborates on the challenges ahead for monetary policy, financial stability frameworks, and the deepening of financial markets.

Monetary policy --- Thailand

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This paper develops a small open economy dynamic stochastic general-equilibrium model with macrofinancial linkages. The model includes a financial accelerator--entrepreneurs are assumed to partially finance investment using domestic and foreign currency debt--to assess the importance of financial frictions in the amplification and propagation of the effects of transitory shocks. We use Bayesian estimation techniques to estimate the model using India data. The model is used to assess the importance of the financial accelerator in India and the optimality of monetary policy.

Finance --- Business & Economics --- Money --- Monetary policy --- Banks and banking, Central --- Econometric models. --- Banker's banks --- Banks, Central --- Central banking --- Central banks --- Monetary management --- Banks and banking --- Economic policy --- Currency boards --- Money supply --- Foreign Exchange --- Inflation --- Investments: General --- Labor --- Macroeconomics --- Monetary Policy --- Central Banks and Their Policies --- Policy Objectives --- Policy Designs and Consistency --- Policy Coordination --- Labor Demand --- Price Level --- Deflation --- Macroeconomics: Consumption --- Saving --- Wealth --- Investment --- Capital --- Intangible Capital --- Capacity --- Labour --- income economics --- Currency --- Foreign exchange --- Self-employment --- Exchange rates --- Consumption --- Depreciation --- Prices --- National accounts --- Self-employed --- Economics --- Saving and investment --- India

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This paper develops a practical model-based forecasting and policy analysis system (FPAS) to support a transition to an inflation forecast targeting regime in Sri Lanka. The FPAS model provides a relatively good forecast for inflation and a framework to evaluate policy trade-offs. The model simulations suggest that an open-economy inflation targeting rule can reduce macroeconomic volatility and anchor inflationary expectations given the size and type of shocks faced by the economy. Sri Lanka could aim to target a broad inflation range initially due to its susceptibility supply-side shocks while enhancing exchange rate flexibility and strengthening the effectiveness of monetary policy in the transition to an inflation forecast targeting regime.

Inflation targeting --- Economic forecasting --- Economics --- Forecasting --- Economic indicators --- Targeting, Inflation --- Monetary policy --- Econometric models. --- Foreign Exchange --- Inflation --- Money and Monetary Policy --- Production and Operations Management --- Monetary Policy --- Price Level --- Deflation --- Macroeconomics: Production --- Currency --- Foreign exchange --- Macroeconomics --- Monetary economics --- Exchange rates --- Real exchange rates --- Output gap --- Prices --- Production --- Economic theory --- Sri Lanka