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The Role of Interest Rates in Business Cycle Fluctuations in Emerging Market Countries :, The Case of Thailand

Abstract
Emerging market countries have enjoyed an exceptionally favorable economic environment throughout 2004, 2005, and early 2006. In particular, accommodative U.S. monetary policy in recent years has helped create an environment of low interest rates in international capital markets. However, if world interest rates were to take a sudden upward course, this would lead to less hospitable financing conditions for emerging market countries. The purpose of this paper is to measure the effects of world interest rate shocks on real activity in Thailand. The analysis incorporates balance sheet related credit market frictions into the IMF’s Global Economy Model (GEM) and finds that Thailand would best minimize the adverse effects of rising world interest rates if it were to follow a flexible exchange rate regime
Table Of Contents
""Contents""; ""I. INTRODUCTION""; ""II. INTEREST RATES AND BUSINESS CYCLES""; ""III. THE GLOBAL ECONOMY MODEL WITH THE FINANCIAL ACCELERATOR""; ""IV. THE EFFECTS OF A 1 PERCENT U.S. INTEREST RATE HIKE""; ""V. A REPEAT OF THE GLOBAL BOND MARKET ROUT OF 1994?""; ""VI. WHAT ROLE FOR MONETARY POLICY?""; ""VII. CONCLUSION""; ""REFERENCES""
Language
eng
Literary Form
non fiction
Note
"May 2006."
Physical Description
1 online resource (24 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781283518246

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