Macroeconomic Resilience of Emerging Economies to Global Financial Conditions

Download or read book Macroeconomic Resilience of Emerging Economies to Global Financial Conditions written by Hyunju Kang and published by . This book was released on 2015 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores the macroeconomic resilience of emerging market economies (EMEs) to global financial conditions over time. For this purpose, we employ a time-varying parameter VAR model to analyze the non-constant effects of global financial shocks on EME aggregate variables. Based on the analysis of data from Brazil, Korea, Mexico, South Africa, Taiwan, and Thailand, the main findings are: (1) While the global financial risk shock has a negative impact on EMEs, we did not find evidence that the US interest rate shock is countercyclical. Thus, we find that the global risk shock is a more important risk factor than the US interest rate shock to EMEs. (2) The adverse impact of the global risk shock on EMEs has been noticeably mitigated in the majority of sample countries.