Credible Emerging Market Central Banks could embrace Quantitative Easing to fight COVID-19

Gianluca Benigno, Jon Hartley (), Alicia García-Herrero (), Alessandro Rebucci () and Elina Ribakova ()
Additional contact information
Jon Hartley: MPP Candidate and researcher, Harvard Kennedy School
Alicia García-Herrero: Senior Research Fellow, Bruegel
Elina Ribakova: Deputy Chief Economist, Institute of International Finance
Authors registered in the RePEc Author Service: Alicia Garcia Herrero

No 2020-75, HKUST IEMS Working Paper Series from HKUST Institute for Emerging Market Studies

Abstract: Emerging economies are fighting COVID-19 and the economic sudden stop imposed by the containment and lockdown policies, in the same way as advanced economies. However, emerging markets also face large and rapid capital outflows as a result of the pandemic. This column argues that credible emerging market central banks could rely on purchases of local currency government bonds to support the needed health and welfare expenditures and fiscal stimulus. In countries with flexible exchange rate regimes and well-anchored inflation expectations, such quantitative easing would help ease financial conditions, while minimizing the risks of large depreciations and spiralling inflation.

Keywords: Coronavirus; COVID-19; Quantitative Easing; Emerging Markets; Fiscal Stimulus (search for similar items in EconPapers)
Pages: 10 pages
Date: 2020-06, Revised 2020-06
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://iems.ust.hk/assets/publications/working-papers-2020/iemswp2020-75.pdf First version, 2020 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hku:wpaper:202075

Access Statistics for this paper

More papers in HKUST IEMS Working Paper Series from HKUST Institute for Emerging Market Studies Contact information at EDIRC.
Bibliographic data for series maintained by Carla Chan ( this e-mail address is bad, please contact ).