By Andrés Fernández, Daniel Hernaiz and Andrew Powell Most of the largest economies in Latin America have adopted inflation targeting [1]. A huge advantage of having such an anchor, and not relying on a fixed exchange rate to curb diverging expectations, is that the exchange rate is then determined by the market and can adjust to shocks. Given the large shocks the region has … [Read more...] about Interest Rates are Falling, But Not So Fast
Andrés Fernández
Andrés Fernández is a Research Economist in the Research Department at the Inter-American Development Bank. He holds a Ph.D. in Economics from Rutgers University and previously worked as Assistant Professor at the Universidad de Los Andes in Bogotá, Colombia. His main research agenda focuses on building, calibrating and estimating dynamic stochastic general equilibrium models for emerging economies. One area of his research agenda is devoted to the study of the sources of business cycles in emerging economies including driving forces of financial and real nature. He has also extended this framework to study intrinsic features of Latin American economies such as the presence of financial frictions and the significant co-movement in the macro dynamics of the economies in the region. Another area he is currently working on is extending this class of models to account for the observed dynamic patterns of labor markets in Latin American economies.
Searching for a New Macroprudential Framework
The policy of quantitative easing led by advanced economies and the subsequent surge of capital flows to emerging economies (EMEs) after the global financial crisis together with their recent reversal have highlighted the need to tailor a macro approach for EMEs that incorporates financial stability as an explicit policy target. But what should the approach be? Should it take … [Read more...] about Searching for a New Macroprudential Framework