مقاله انگلیسی رایگان در مورد تأثیر افزایش نرخ بهره ایالات متحده بر اقتصاد بازارهای نوظهور و راه ابریشم جدید – وایلی 2019

I- Introduction

II- Determinants of Emerging Market Capital Flows

III- The Belt and Road Initiative and the Prevention of Financial Risks in Emerging Countries

V- Conclusion

References

Abstract

Since the end of 2015, the US Federal Reserve has raised its benchmark interest rate nine times. This has led to capital outflows and asset depreciation in many emerging market economies. The present paper examines the factors that determine the financial volatility of emerging markets in the face of external shocks. By calculating the capital flows of 30 emerging markets from 1990 to 2018 and conducting panel regression, this paper finds that countries with good infrastructure facilities, a sound banking system and high economic growth have significantly lower cross-border financial risks. An implication from the empirical analysis is that emerging countries would benefit greatly by actively taking part in the Belt and Road Initiative. The framework of the Belt and Road Initiative allows emerging countries better access to China’s massive consumer market to promote trade and long-term growth. Their quality of infrastructure can be improved through cooperation with China in infrastructure investment. They can also jointly establish a cooperative financial framework to enhance regional financial stability. These strategies will reduce systematic financial risks and counteract the negative impacts of US interest rate hikes.

Introduction

In December 2015, the US Federal Reserve raised the benchmark interest rate for the first time since introducing quantitative easing policies in 2008. The rate was changed after an increase in US economic growth from 2.6 percent in 2014 to 2.9 percent in 2015. Since then, the US economy has witnessed consistent economic recovery. There has been an upward trend in GDP growth, from 1.5 percent in 2016 to 2.9 percent in 2018 and the labor market has been stable, with the unemployment rate hitting 3.5 percent, the lowest level in the past 50 years.1 Much cross-border capital flowed from emerging economies to the US, pushing up the exchange rate of the US dollar. Against this backdrop, the Federal Reserve raised the benchmark rates once in 2016, three times in 2017 and four times in 2018. The current benchmark rate has returned to a normalized level of 2.25–2.5 percent. The US interest rate hike had negative spillover effects on emerging market economies. In 2018, the Chinese RMB and Indian rupee depreciated against the US dollar by 5.4 and 8.3 percent, respectively (Figure 1). The Turkish Iira, Brazilian real and South African rand depreciated more violently, approximately 28.5, 14.6 and 13.9 percent, respectively, in the same year. Another spillover effect of the tighter US monetary policy was the panic in emerging markets. As a result of pessimistic investor expectations, interest rates in the bond markets surged, while in some emerging economies the stock markets collapsed.