How Resilient Were Emerging Market Economies Through the 2022‑23 U.S. Monetary Tightening Cycle?

Shaghil Ahmed, Ozge Akinci and Albert Queraltó
Additional contact information
Albert Queraltó: https://www.federalreserve.gov/econres/albert-queralto.htm

No 20260626, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: The cross-border spillover effects of shifts in U.S. monetary policy have long been a focus of academics and policymakers alike. A common finding in the literature is that changes in the stance of U.S. monetary policy have sizable effects on economic activity and financial markets in emerging market economies (EMEs). In this post, we analyze one specific aspect of these spillovers: how EMEs fared through the U.S. monetary policy tightening cycle of 2022-23 relative to the predictions of a model, which was calibrated to capture empirically relevant features of these economies based on historical data. We find that more vulnerable EMEs fared better in both financial market and growth outcomes than would be expected from our model, while the relatively less vulnerable fared a bit better than the model predictions for financial outcomes but substantially worse for growth outcomes.

Keywords: spillovers; growth-driven U.S. monetary shocks; monetary-driven U.S. monetary shocks; emerging markets; Vulnerabilities (search for similar items in EconPapers)
JEL-codes: E32 E44 F41 (search for similar items in EconPapers)
Date: 2026-06-26
References: Add references at CitEc
Citations:

Downloads: (external link)
https://libertystreeteconomics.newyorkfed.org/2026 ... ry-tightening-cycle/ Full text (text/html)

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:fip:fednls:103439

Ordering information: This working paper can be ordered from

DOI: 10.59576/lse.20260626

Access Statistics for this paper

More papers in Liberty Street Economics from Federal Reserve Bank of New York Contact information at EDIRC.
Bibliographic data for series maintained by Gabriella Bucciarelli ().