Monetary policy in the aftermath of currency crisis: the case of Asia

Ilan Goldfajn and Taimur Baig ()

No 399, Textos para discussão from Department of Economics PUC-Rio (Brazil)

Abstract: This paper evaluates monetary policy and its relationship with the exchange rate in the five Asian crisis countries. The findings are compared to previous currency crises in recent history. The paper finds that there is no evidence of overly tight monetary policy in the Asian crisis countries in 1997 and early 1998. There is also no evidence that high interest rates led to weaker exchange rates. The usual trade-off between inflation and output when raising interest rates suggested the need for a softer monetary policy in the crisis countries to combat recession. However, in some countries, corporate balance sheet considerations suggested the need to reverse overly depreciated currencies through firmer monetary policy.

JEL-codes: E44 E63 (search for similar items in EconPapers)
Pages: 51 pages
Date: 1999-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Monetary Policy in the Aftermath of Currency Crises: The Case of Asia (2002)
Working Paper: Monetary Policy in the Aftermath of Currency Crises: The Case of Asia (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:rio:texdis:399

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