Monetary policy in low-income countries in the face of the global crisis : the case of Zambia /

Monetary policy in low-income countries in the face of the global crisis : the case of Zambia /

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Bibliographic Details
Imprint:[Washington, D.C.] : International Monetary Fund, ©2012.
Description:1 online resource (46 pages) : charts
Language:English
Series:IMF working paper ; WP/12/94
IMF working paper ; WP/12/94.
Subject:
Monetary policy -- Zambia -- Econometric models.
Global Financial Crisis, 2008-2009.
Financial crises -- Zambia -- Econometric models.
Financial crises -- Econometric models.
Monetary policy -- Econometric models.
Zambia.
Electronic books.
Format: E-Resource Book
URL for this record:http://pi.lib.uchicago.edu/1001/cat/bib/12500168
Hidden Bibliographic Details
Other authors / contributors:Baldini, Alfredo, author.
International Monetary Fund, issuing body.
ISBN:9781475502848
1475502842
9781475507041
1475507046
9781475574609
1475574606
Notes:Title from PDF title page (IMF Web site, viewed April 9, 2012).
"April 2012."
Includes bibliographical references (pages 31-33).
Summary:We develop a DSGE model with a banking sector to analyze the impact of the financial crisis on Zambia and the role of the monetary policy response. We view the crisis as a combination of three related shocks: a worsening in the terms of the trade, an increase in the country's risk premium, and a decrease in the risk appetite of local banks. We characterize monetary policy as "stop and go": initially tight, subsequently loose. Simulations of the model broadly match the path of the economy during this period. We find that the initial policy response contributed to the domestic impact of the crisis by further tightening financial conditions. We study the factors driving the "stop" part of policy and derive policy implications for central banks in low-income countries.
Other form:Print version: Monetary policy in low-income countries in the face of the global crisis : the case of Zambia. [Washington, District of Columbia] : International Monetary Fund, ©2012 46 pages IMF working paper ; WP/12/94 9781475502848
Table of Contents:
  • Cover; Contents; I: Introduction; II: Core model structure; A: Households; B: Firms; 1 Domestic Firms; 2 Exporting Firms; C: The Banking Sector; D: Monetary Authority; E: The Government; F: Relationship with the Rest of the World; III: Applying the model to Zambia; A: The Zambia data set; B: Calibration and functional forms; C: Overview of shocks and the transmission mechanism; D: Replicating the crisis; E: Baseline results; F: Shock decomposition; G: The role of the monetary policy response: shock counterfactuals; H: The role of the monetary policy response: rule counterfactuals.
  • IV: Understanding the initial monetary policy responseV: Conclusion; VI: Appendices; A: Appendix A; 1 Notational conventions; B: Appendix B; Tables; 1 Calibration of model parameters and steady-state ratios; 2 Model performance across alternative monetary policy responses; 3 Money targets in Zambia, 2008-2009, in bn of Kwacha.; Figures; 1 Model blocks; 2 Impulse response functions of key variables to a terms of trade shock and a monetary policy shock.; 3 Impulse response functions of key variables to a risk premium shock and a banking shock.; 4 Overview of the baseline simulation.
  • 5 Tuned paths of external shocks. 6 Structural shock decomposition 1.; 7 Structural shock decomposition 2.; 8 Structural shock decomposition: monetary variables.; 9 Counter-factual simulation 1: flat money growth.; 10 Counter-factual simulation 2: expansionary policy.; 11 Key monetary variables prior to and during the crisis.

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