This blog is based on a presentation made by Jeffrey Frankel at the SEACEN Policy Summit 2026: The Future of the International Monetary System and the Role of Asia (5– 6February 2026). The Dollar’s Legacy and Its “Exorbitant Privilege” The U.S. dollar supplanted the British pound as the dominant international currency in the 20th century. […]
Tag Archives: macroeconomics
Financial Stability, Macroeconomics and Monetary Policy
Capital Flow Management during the Taper Tantrum
20
Feb
Feb
Emerging market economies often face acute challenges in the wake of sudden bouts of market volatility triggered by sharp capital outflows. Managing such turbulence—particularly when macroeconomic fundamentals offer limited support—requires a calibrated mix of conventional and unconventional policy responses. There is rarely a textbook solution to crises of this nature; central banks must deploy all available instruments with agility, while maintaining credible and consistent communication to anchor expectations.
25
Mar
Mar
Capital flows and their volatility present challenges for economic policy makers. They can exacerbate economic cycles. Their outflows can lead to costly “sudden stops”. One particular form of capital flows, namely foreign direct investment (FDI) has been regarded differently compared to other forms of capital flows like debt and portfolio flows. First, unlike foreign portfolio […]
Macroeconomics and Monetary Policy
Job-to-job transitions: A different lens for understanding wage dynamics
16
Mar
Mar
Since the global financial crisis, a number of central banks have been undershooting their inflation targets. Over this period labour markets have tightened steadily in many countries with unemployment rates reaching record lows. At the same time, wage growth has remained weak by historical standards. Some researchers argued that the Phillips curve, the main paradigm […]
02
Mar
Mar
In the wake of the Great Financial Crisis, the Basel Committee on Banking Supervision (BCBS) argued for counter-cyclical capital buffers and published operational guidelines (BCBS 2010) for regulators. The cornerstone of the BCBS proposal was the use of cyclical movements in the credit-to-GDP ratio gap to trigger increases in the capital required to be held […]