The effectiveness of policy makers during uncertain environment: Evidence from a set of emerging market economies

Soon, Siew Voon and Baharumshah, Ahmad Zubaidi (2018) The effectiveness of policy makers during uncertain environment: Evidence from a set of emerging market economies. In: Asia Conference on Business Economic Studies (ACBES 2018), 8-9 September 2018, University of Economics Ho Chi Minh City, Ho Chi Minh, Vietnam.

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Abstract

This paper ascertain the effect of changes in the domestic interest rate on exchange rate movement, using monthly data from a set of emerging market economies. The central banks are responding to the exchange rate movements in addition to the other core variables, namely, inflation gap and the output gap. In addition, countries with a high degree of financial openness are more responsive to the movement in the exchange rate, but this has weakened the effectiveness of disinflationary policy. Policy makers should behave pre-emptive and necessitate the exchange rate adjustment as alternative policy choice, in the calculus of formulating policy rule.

Item Type: Conference or Workshop Item (Paper)
Additional Information: Conference paper
Uncontrolled Keywords: Taylor Rule; inflation stabilities; exchange rate; emerging market economies
Subjects: H Social Sciences > HC Economic History and Conditions
Divisions: Faculty of Economics & Administration
Depositing User: Mr. Mohd Safri
Date Deposited: 28 Feb 2019 08:39
Last Modified: 28 Feb 2019 08:39
URI: http://eprints.um.edu.my/id/eprint/20356

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