01976cas a2200277 a 4500 AALejournalIMF011790 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475502848 1018-5941 BD-DhAAL BD-DhAAL Benes, Jaromir. Monetary Policy in Low Income Countries in the Face of the Global Crisis : The Case of Zambia / Jaromir Benes, Andrew Berg, Rafael Portillo, Mai Dao. Washington, D.C. : International Monetary Fund, 2012. 1 online resource (47 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students 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. Mode of access: Internet Berg, Andrew. Dao, Mai. Portillo, Rafael. IMF Working Papers; Working Paper ; No. 2012/094 Full text available on IMF http://elibrary.imf.org/view/journals/001/2012/094/001.2012.issue-094-en.xml IMF e-Library