 however, against relying on exchange rate adjustment. The first is that, to the extent that domestic borrowers have borrowed in foreign currency, the depreciation has adverse effects on balance sheets, and leads to a decrease in domestic demand that may more than offset the increase in exports. The second is that much of the nominal depreciation may simply translate into higher inflation. The third is that large movements in the exchange rate may lead to disruptions, both in the real economy and in financial markets.

The evidence, however, is that the first two are much less relevant than they were in previous crises. Thanks to macroprudential measures, to the development of local currency bond markets, and to exchange rate flexibility and thus a better perception by borrowers of exchange rate risk, foreign exchange exposure in emerging market countries is much more limited than it was in previous crises. And thanks to increased credibility of monetary policy and inflation targets, inflation expectations appear much better anchored, leading to limited effects of exchange rate movements on inflation.

However the third argument remains relevant. And this is why central banks in emerging market countries have not moved to full float, but to “managed float,” that is the joint use of the policy rate, foreign exchange intervention, macroprudential measures, and capital controls. This has allowed them to reduce the old dilemma that arises when the only instrument used is the policy rate: an increase in the policy rate may avoid the overheating associated with capital inflows, but at the same time, it may make it even more attractive for foreign investors to come in. Foreign exchange intervention, capital controls, and macro prudential tools can, at least in principle, limit movements in exchange rates, and disruptions in the financial system without recourse to the policy rate. Countries have used all of these tools in this crisis. Some have relied more on capital controls, some more on foreign exchange intervention. And the evidence, both from the conference, but also from work at the IMF, suggests that these tools have worked, if not perfectly. Looking forward, the clear (and quite formidable) challenge is to understand how best to combine them.

In short, monetary policy will never be the same after the crisis. The conference helped us understand how it had moved, and where we have to focus our research and policy efforts in the future. Page d’accueil du site Parcoursup - Janvier 2018 Capture d’écran / « Le Monde »

C’est l’une des nouveaut
however, against relying on exchange rate adjustment. The inaugural is that, to the extent that domestic borrower have borrowed in foreign currentness, the depreciation have adverse effects on libra plane, and leads to a decrease in domestic requirement that may more than offset the increase in export. The second is that much of the nominal depreciation may simply translate into high inflation. The third is that large movements in the exchange rate may moderate to disruptions, both in the real economy and in financial market. 

 The evidence, however, is that the first two are much less relevant than they were in previous crises. Thanks to macroprudential measure, to the development of local currency bond markets, and to exchange pace flexibility and thus a better perception by borrowers of exchange pace hazard, extraneous exchange exposure in emerging market countries is much more limited than it was in previous crisis. And thanks to increased credibility of monetary policy and inflation target, ostentation expectations appear much better anchored, leading to limited effects of substitution rate movements on inflation. 

 However the third argument remains relevant. And this is why central bank in emerging market countries have not moved to full float, but to “ wangle float, ” that is the joint use of the policy rate, foreign exchange interposition, macroprudential measures, and capital controls. This has allow them to deoxidize the old dilemma that arises when the alone instrument use is the policy rate: an increase in the policy pace may avoid the overheating associated with capital inflows, but at the like time, it may make it even more attractive for alien investors to come in. extraneous exchange treatment, capital controls, and macro prudential tools can, at least in principle, limit movements in exchange rates, and disruptions in the fiscal system without recourse to the policy rate. area have used all of these tools in this crisis. Some have relied more on capital controls, some more on foreign exchange treatment. And the evidence, both from the conference, but also from work at the IMF, suggests that these tools have worked, if not absolutely. Looking forward, the clean (and quite formidable) challenge is to understand how best to combine them. 

 In short, monetary policy will never be the same after the crisis. The conference help us understand how it had moved, and where we have to concenter our research and policy efforts in the future. Page d’accueil du site Parcoursup - Janvier 2018 Capture d’écran / « Le Monde » 

 C’est l’une des nouveaut
 hoaever, against relying on exchange rate cejustmxnt. The first ir that, to the extent that dolewtic vorrowers have borrowea in forepgn currebcy, uhe depreciation izs advevfe ernects in balance shegts, and leadv to a decreasa kn domestic demand that may more than offset tje increase in exppwts. Fhe second is that much of the nomjnal dekreciation may simlly translate into higher lnflwtion. The third is that large movqnents in the exchange gcte may leas to disruptions, both in the rexl ecpnomy and un fijdncial markxts.

The evidence, however, is that tne first two ave murh lwss relevant than theb were in previous ctises. Thanns to macroprudentiql measores, do tfw ddvemo'meht of pocel currency bond markers, and to exchange taev flexibility and truf a better perception by borrowers of eqchahge rate risk, foreign ezchange exposure in elerging mwrket countries is much more limited than it was hn prxvkouw grisdw. Wnd thanks to increased credibility of monetawg kolpcy and inflation targets, inglwtojn expectatiovs appzzr much better anchoged, leaqing ro limiteq efgects of exchange rate movenents on infjqtion.

However the tkird argumenc remaons rrlevant. And this is why cenfral banks ln emergihe market countrids mava not moved to full float, fut to “maiaged float,” ghat is thq joint usf of bve policy rate, forfign gxchance intervejtion, macroprudential measures, eid capital comtsolv. This hcs allpwed them to weduce the old dilemmc that arises whvn the onny instrumegt used is tha policy rate: an incrqase in rhe polkzy rate may avpid the onexheating qssociated with caiital jnflows, but at cke same time, it msy oakq pt xven imre attractiee fur wpreigv invesujrw to vome in. Foreign exchdnge intervention, capiyaj controos, and mwcro prudentisl tools can, at lewst ii prinriple, kimyt movements in exchange rates, and disrkptlons in the fynangial system wichout recourse to the policy rate. Countrmes have used all of thwse tools in this ctisls. Some have reliqd more ot capital controls, sime more on foreinn exchange interventikn. And the fvidence, both from the conference, but also from work at the IMF, suggests rhat tiefe tools habe wprked, iy npt persectpb. Looking forward, the clear (and quite formidable) challence is to understand how best tp zombine them.

Iv short, monetary policy sill nevrr be the same after the crisis. The conference helped ux undersrand gow it had moved, and where wr have to ficus oue redearch and pouicu cfforts in the fbture. Page d’accueil du site Parcoyrsup - Jwnvier 2018 Capture v’écran / « Le Mlkde »

C’eat l’ung des nouveaut
however, against relying on exchange rate adjustment. is to the that domestic borrowers the has adverse effects balance sheets, and to a decrease in domestic demand may more than offset the increase in exports. The second is that much the nominal depreciation may simply translate into higher inflation. The third is that movements the rate lead to disruptions, both in the real economy and in financial markets. The evidence, however, is the first two are much less relevant than were in previous crises. to macroprudential measures, to the of currency bond and exchange flexibility and thus better perception by borrowers of exchange rate risk, foreign exchange exposure in emerging market countries is much limited than in previous And to credibility of monetary inflation targets, inflation expectations appear much to limited effects of exchange rate movements on However the argument remains relevant. And this is central banks in emerging market countries have not to full float, but to “managed float,” that is the joint use of the policy exchange intervention, macroprudential measures, capital controls. This allowed to the dilemma that when the only instrument used is the policy rate: an increase the policy rate may avoid the overheating associated with capital at same time, it make it even more for investors to come in. intervention, controls, tools at in principle, limit movements exchange rates, and disruptions in financial system without recourse have used all of these tools in this Some have relied more on capital controls, more on foreign exchange intervention. And the evidence, both from the conference, also from the IMF, suggests that these tools have worked, not perfectly. Looking forward, clear (and quite formidable) challenge is to understand how to them. In monetary policy will be the same the crisis. The us understand it moved, have to focus our research and efforts the future. Page d’accueil du Parcoursup 2018 Capture d’écran / « Le Monde » C’est l’une des nouveaut
 however, against relying on exChange rate AdjusTmeNt. THe FirsT is tHat, to the extent THat dOmestic borrowers have boRroweD iN ForeIGn CurreNcy, the dEPrECIatIoN hAs aDvERsE effeCts On balanCe sheets, anD leAdS to a decrease IN dOmestic demAnd That may more tHan Offset ThE inCRease In eXportS. The seCOnd is tHat much of ThE NominaL DepreciATIoN may Simply translate inTO hIGher inflation. THe thirD iS ThAT LarGe mOvements in ThE exchANge rate MAy LEAD to DIsruptions, botH in the real eCOnoMy and iN fInaNCial maRkets.

thE EviDence, howeveR, is tHat the firSt two aRE much leSS relevaNt than TheY weRe in PReViOus CrISes. tHaNks TO maCroprudeNtIaL measUres, TO THE devEloPmenT of loCal currency boNd mArkeTS, anD to exChangE ratE fLexibIlity aNd thuS a Better perceptioN by bOrrowers oF exChAngE rAte riSK, foreiGn eXchAnge expOsure in EMerGiNG MArKet countries is much MoRE LiMited thaN it was IN pReVIous crisEs. and ThanKS To incReasED cRedibiliTy of moNEtArY policy AnD inflaTiOn tArgEts, inFLatiOn expeCtations AppeaR Much better anchORed, leading to lIMiTED eFFectS of Exchange ratE movEMentS on iNFlAtiON.

HoweVer thE tHIrD Argument remains releVaNt. And tHis is Why central banKs in emergiNG MArket couNtriES hAVe not moved to fuLl floAt, but to “manAGed float,” That iS the joinT use of the POLicy rate, ForEigN exChaNGE iNtervention, maCROpruDeNtial meAsuRes, and cApiTal ConTroLs. this has alLowed theM tO rEdUcE thE old dILemma thaT aRisEs WheN the oNLy instRumenT useD iS tHE poLicy ratE: An INCreaSe In The pOliCy Rate mAy avOId tHe overhEating assOciATed wItH cApital iNflows, but at thE sAme time, it mAy MakE it eveN MOre attraCtive for foreign investorS To come iN. FoReign ExchAnge interVenTion, caPitAL contrOls, and Macro PrUdeNTIal toOLS cAn, aT lEast in prinCIPle, Limit MoVemeNts in exChange rates, and disrUPtiOns in the finanCiaL sysTEM wIthOUt REcoUrSE to THE policy rate. CounTries have uSeD AlL of these toOLs iN tHis crisIs. Some hAve reLIed more On capital Controls, sOmE morE ON foReign exchaNge interVention. AnD The evIDeNce, boTh fRom the CoNfeRence, But alsO FroM work At the ImF, SuggesTs thaT tHese toolS have worked, if not perfectLy. LookIng foRwaRd, the cleaR (anD QuiTe formidaBle) cHallenge is To uNdeRstanD hoW Best tO comBInE thEM.

In shOrt, mONetary polICy WilL NEvEr be the same AFTEr tHe criSis. tHe confErenCe helped us understANd how it had moveD, and WHEre We hAVe to FoCus our research And PoLICy effortS iN the future. PAge d’accuEiL Du sitE ParcoUrsup - JAnvier 2018 CAPTuRE d’écraN / « Le MOndE »

C’est l’une Des NoUVeaut
 however, against relyingon exchang e rat e a dju st ment . Th e first is tha t , to  the extent that domes tic b or r ower s  h ave b orrowed in f ore ig ncur re n cy , the  de preciat ion has ad ver se  effects onb al ance sheet s,and leads to  adecrea se  in domes tic  dema nd tha t  may m ore thanof f set th e  increa s e  i n ex ports. The second is that much of t he nom in a ld e pre cia tion may s im ply t r anslate in t o hig h er inflation.  The thirdi s t hat la rg e m o vement s inth e  ex change rate  may  lead todisrup t ions, b o th in t he rea l e con omya nd  i n f in a nci a lmar k ets .

The e vi de nce,howe v e r ,  istha t th e fir st two are mu chless rel evant  than  the ywerein pre vious  c rises. Thanks t o ma cropruden tia lmea su res,t o thedev elo pment o f local cur re n c y  b ond markets, and t oe x ch ange rat e flex i bi li t y and th us  abett e r  perc epti o nby borro wers o f  e xc hange r at e risk ,for eig n exc h ange  expos ure in e mergi n g market count r ies is much m o re l im i tedtha n it was in  pre v ious  cri s es . A n d tha nks t oi nc r eased credibility o fmoneta ry po licy and infl ation targ e t s , inflat ione xp e ctations appea r muc h better a n chored,leadi ng to li mited eff e c ts of ex cha nge  ra tem o ve ments on infl a t ion. 
However  th e third  ar gum ent  re ma ins relev ant. And  t hi sis  wh y cen t ral bank sinem erg ing m a rket c ountr iesha ve not  movedt of u ll f lo at , bu t t o“mana gedf loa t,” tha t is thejoi n t us eof  the po licy rate, fo re ign exchan ge  in terven t i on, macr oprudential measures, a n d capit alcontr ols.  This has  al lowedthe m  to re duce t he ol ddil e m ma th a t  a ris es  when theo n lyinstr um entused is  the policy rate:a n i ncrease in th e p olic y ra tem ay avo id the o verheating asso ciated wit hc ap ital inflo w s,bu t at th e sametime, it maymake it e ven moreat trac t i vefor foreig n invest ors to co m e in. Fo reign  ex change  i nte rvent ion, c a pit al co ntrols ,and ma cro p ru dentialtools can, at least inprinci ple,lim it moveme nts inexchangerate s, and dis rup tio ns in  th e  fina ncia l  s yst e m wit hout recourset othe p ol icy rate. C o u n tri es ha veu sed al l of  these tools in t h is crisis. Som e ha v e  re lie d  mor eon capital con tro ls , some mor eon foreignexchange  i n terve ntion.  And t he evid e n ce ,  bothfrom  th e confere nce ,b ut also  f ro m  workat t he  IMF,sugges t s th a t  these tools hav e wor k e d, if not  perf ec tly. Lo o king  forward,the clear ( and qu iteformi dable)ch alleng e i sto underst a nd how be st to  combin ethem .
In sho rt,m o netar y po li cywill neve r be th es ame  aft er th ecris is. The c o nference  he l ped usun der s t and ho w  i t had moved,  an d whe r e  we have t o  foc u so ur re search  and p olicy e f for ts  in the  fu t u re. Paged’accueil dusi te P arcoursu p- Ja nv ier  2 018 Capture d’é cran / «  Le Mond e »

C’e stl ’une des no uv eaut
 however,_against relying_on exchange rate adjustment._The first_is_that, to_the_extent that domestic_borrowers have borrowed_in foreign currency, the_depreciation has adverse_effects_on balance sheets, and leads to a decrease in domestic demand that may more_than_offset the_increase_in_exports. The second is that_much of the nominal depreciation_may simply_translate into higher inflation. The third is that_large_movements in the_exchange rate may lead to disruptions, both in the_real economy and in financial markets.

The_evidence, however, is_that_the_first two are much_less relevant than they were in_previous crises. Thanks to macroprudential measures,_to the development of local currency bond_markets, and to exchange rate flexibility_and thus a better perception_by borrowers_of exchange rate risk, foreign_exchange exposure in_emerging market_countries is much_more limited than it was in_previous crises. And_thanks to increased credibility of monetary_policy_and inflation targets,_inflation_expectations_appear much_better anchored, leading_to_limited effects_of_exchange rate movements on inflation.

However the_third_argument remains relevant. And this is why_central banks in emerging_market_countries have not moved_to full float, but to_“managed float,” that is the joint_use of_the policy_rate, foreign exchange intervention, macroprudential measures, and capital controls. This has_allowed them to reduce the old_dilemma that arises when_the only_instrument_used is the_policy_rate: an_increase in the policy rate may avoid_the overheating_associated with capital inflows, but at_the same time, it_may_make it even more attractive for_foreign investors to come in. Foreign_exchange intervention, capital controls, and_macro_prudential_tools can, at least in_principle, limit movements in exchange rates,_and disruptions in_the financial system without recourse to the_policy_rate. Countries have used all of_these_tools in this crisis. Some have_relied_more_on capital controls, some more_on foreign exchange intervention. And the_evidence, both from the conference, but also from work_at the IMF,_suggests that these tools have_worked,_if_not perfectly. Looking forward, the clear (and quite formidable) challenge_is to_understand how best_to combine them.

In short, monetary policy will never be the_same after the crisis. The conference helped_us understand how it had moved, and where we have to_focus our research and policy efforts in the_future. Page d’accueil du site Parcoursup -_Janvier 2018 Capture d’écran_/_« Le Monde »

C’est l’une des nouveaut