Emerging Market Economies’ Challenge: Managing the Yield Curve in a Financially Globalized World

Hiro Ito and Phuong Tran
Additional contact information
Phuong Tran: Comscore, Inc.

Open Economies Review, 2023, vol. 34, issue 1, No 7, 194 pages

Abstract: Abstract In a financially globalized world, managing long-term interest rates through short-term interest rates can be difficult. In this paper, we examine whether net capital inflows contribute to weakening the link between short- and long-term interest rates. We find that more financially open economies or those with more developed financial markets tend to have a greater negative relationship between net capital inflows and short- to long-term interest rate pass-through. We also examine whether macroprudential policies can affect the extent of interest rate pass-through and find that broad-based capital macroprudential tools are effective in retaining control of interest rate pass-through.

Keywords: Financial liberalization; Yield curve; Trilemma; Macroprudential policy (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11079-021-09661-3 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:openec:v:34:y:2023:i:1:d:10.1007_s11079-021-09661-3

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11079/PS2

DOI: 10.1007/s11079-021-09661-3

Access Statistics for this article

Open Economies Review is currently edited by G.S. Tavlas

More articles in Open Economies Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().