An Estimated Model with Macrofinancial Linkages for India PDF Download

Author: Mr.Magnus Saxegaard
Publisher: International Monetary Fund
ISBN: 1451962320
Category : Business & Economics
Languages : en
Pages : 46

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Book Description
This paper develops a small open economy dynamic stochastic general-equilibrium model with macrofinancial linkages. The model includes a financial accelerator--entrepreneurs are assumed to partially finance investment using domestic and foreign currency debt--to assess the importance of financial frictions in the amplification and propagation of the effects of transitory shocks. We use Bayesian estimation techniques to estimate the model using India data. The model is used to assess the importance of the financial accelerator in India and the optimality of monetary policy.

Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1451982321
Category : Business & Economics
Languages : en
Pages : 74

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Book Description
This 2009 Article IV Consultation highlights that India’s medium-term growth prospects remain bright. Prompt fiscal and monetary easing, combined with the fiscal stimulus already in the pipeline and the return of risk appetite in financial markets, have brought growth close to pre-crisis levels. Risks to a favorable outlook stem primarily from difficulties in implementing productivity-enhancing reforms and continued supply bottlenecks. Executive Directors have congratulated the authorities on their strong record of sound macroeconomic policies and decisive actions leading to India’s early and vigorous recovery from the global crisis.

Author: Matteo Ghilardi
Publisher: International Monetary Fund
ISBN: 1498356915
Category : Business & Economics
Languages : en
Pages : 31

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Book Description
This paper develops an open-economy DSGE model with an optimizing banking sector to assess the role of capital flows, macro-financial linkages, and macroprudential policies in emerging Asia. The key result is that macro-prudential measures can usefully complement monetary policy. Countercyclical macroprudential polices can help reduce macroeconomic volatility and enhance welfare. The results also demonstrate the importance of capital flows and financial stability for business cycle fluctuations as well as the role of supply side financial accelerator effects in the amplification and propagation of shocks.

Author: Asian Development Bank
Publisher: Asian Development Bank
ISBN: 9292624199
Category : Business & Economics
Languages : en
Pages : 120

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Book Description
The Asian financial landscape has grown more interconnected over the past 2 decades. Previous financial crises have shown how financial volatility can transmit rapidly across an interconnected financial network. Empirical analyses have shown, moreover, how financial volatility can reverberate across the macroeconomy. This report summarizes the lessons from past crises, reviews the evidence of the macrofinancial linkages and feedback effects of financial distress, and proposes policy considerations and coordinated responses to enhance financial stability and resilience.

Author: Francis Vitek
Publisher: International Monetary Fund
ISBN: 1475504187
Category : Business & Economics
Languages : en
Pages : 77

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Book Description
This paper develops a structural macroeconometric model of the world economy, disaggregated into thirty five national economies. This panel unobserved components model features a monetary transmission mechanism, a fiscal transmission mechanism, and extensive macrofinancial linkages, both within and across economies. A variety of monetary policy analysis, fiscal policy analysis, spillover analysis, and forecasting applications of the estimated model are demonstrated, based on a Bayesian framework for conditioning on judgment.

Author: Mr.Andreas A. Jobst
Publisher: International Monetary Fund
ISBN: 1475557531
Category : Business & Economics
Languages : en
Pages : 93

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Book Description
The recent global financial crisis has forced a re-examination of risk transmission in the financial sector and how it affects financial stability. Current macroprudential policy and surveillance (MPS) efforts are aimed establishing a regulatory framework that helps mitigate the risk from systemic linkages with a view towards enhancing the resilience of the financial sector. This paper presents a forward-looking framework ("Systemic CCA") to measure systemic solvency risk based on market-implied expected losses of financial institutions with practical applications for the financial sector risk management and the system-wide capital assessment in top-down stress testing. The suggested approach uses advanced contingent claims analysis (CCA) to generate aggregate estimates of the joint default risk of multiple institutions as a conditional tail expectation using multivariate extreme value theory (EVT). In addition, the framework also helps quantify the individual contributions to systemic risk and contingent liabilities of the financial sector during times of stress.

Author: Otaviano Canuto
Publisher: World Bank Publications
ISBN: 1464800030
Category : Business & Economics
Languages : en
Pages : 307

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Book Description
This book deals with the challenges of macro financial linkages in the emerging markets.

Author: Mr. Alfred Schipke
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 290

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Book Description
India has experienced a prolonged period of strong economic growth since it embarked on major structural reforms and economic liberalization in 1991, with real GDP growth averaging about 6.6 percent during 1991–2019. Millions have been lifted out of poverty. With a population of 1.4 billion and about 7 percent of the world economic output (in purchasing power parity terms), India is the third largest economy—after the US and China. As such, developments in India have significant global and regional implications, including via spillovers through international trade and global supply chains. At the same time, India’s economic development has not been linear and has been impacted by external and domestic shocks, some directly related to the financial sector. Indeed, India was not spared from external regional and global shocks, such as the Asian financial crisis (1997), the global financial crisis (2008), and more recently, the devastating impact of the COVID-19 pandemic (from 2020) and the war in Ukraine (2022). The economy has also been hit by domestic shocks. The book covers how to strengthen the financial system to support growth and reduce vulnerabilities by discussing the linkages between the financial sector and growth, improvements in bank lending to foster productivity, and measures to further develop India’s corporate bond market. The book reflects on India’s success in leveraging digitalization to foster financial inclusion and highlights how the financial system can help to address climate issues. This book digs deeper into the various facets of India’s financial sector to understand its strengths and opportunities and to elicit policy actions that could help the financial sector better support India’s growth potential.

Author: International Monetary Fund. Monetary and Capital Markets Department
Publisher: International Monetary Fund
ISBN: 1498321119
Category : Business & Economics
Languages : en
Pages : 85

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Book Description
This Financial System Stability Assessment paper discusses that Canada has enjoyed favorable macroeconomic outcomes over the past decades, and its vibrant financial system continues to grow robustly. However, macrofinancial vulnerabilities—notably, elevated household debt and housing market imbalances—remain substantial, posing financial stability concerns. Various parts of the financial system are directly exposed to the housing market and/or linked through housing finance. The financial system would be able to manage severe macrofinancial shocks. Major deposit-taking institutions would remain resilient, but mortgage insurers would need additional capital in a severe adverse scenario. Housing finance is broadly resilient, notwithstanding some weaknesses in the small non-prime mortgage lending segment. Although banks’ overall capital buffers are adequate, additional required capital for mortgage exposures, along with measures to increase risk-based differentiation in mortgage pricing, would be desirable. This would help ensure adequate through-the cycle buffers, improve mortgage risk-pricing, and limit procyclical effects induced by housing market corrections.

Author: Mr.Christopher W. Crowe
Publisher: International Monetary Fund
ISBN: 1589069390
Category : Business & Economics
Languages : en
Pages : 617

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Book Description
Macrofinancial linkages have long been at the core of the IMF's mandate to oversee the stability of the global financial system. With the advent of the economic crisis, the Fund has drawn on this research in order to contribute to critical debates on the nature of appropriate policy responses at both the national and multilateral levels. The current juncture offers a good opportunity to take stock of this body of research by IMF staff and to share it with a wider audience, particularly since few collections have been published in this area. This volume brings together some of the best writing by IMF economists on macrofinancial issues, and highlights the issues and approaches that have guided IMF thinking in an area that makes up an increasingly important component of the IMF's overall remit. The chapters in the volume fit into three broad themes: financial crises and boom-bust cycles; financial integration, financial liberalization, and economic performance; and policy issues relating to macroeconomic policy and the corporate and financial sectors-including domestic and external financial liberalization.