Most of what we know about Monetary Policy comes from US data, or the Euro Area, or the UK. Relatively little research has been done on the effects of monetary policy on emerging markets. Faced by challenges such as poor data, high volatility and instability, and less liquid markets, they often have unstable policy frameworks.
This research explores the effects of Monetary Policy on emerging markets using modern tools including narrative analysis for diagnostics and interpretation. Bearing in mind that the emerging market policy reaction function is less well-understood by agents and premia and external shocks play an even bigger role, this research provides context into how bond and stocks react to surprises in emerging market economies. It also delves into the puzzling macroeconomic effects of monetary policy.
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