01896cas a2200253 a 4500 AALejournalIMF013166 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475525823 1018-5941 BD-DhAAL BD-DhAAL Jain-Chandra, Sonali. The Effectiveness of Monetary Policy Transmission Under Capital Inflows : Evidence from Asia / Sonali Jain-Chandra, Filiz Unsal. Washington, D.C. : International Monetary Fund, 2012. 1 online resource (19 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 The effectiveness of the monetary policy transmission mechanism in open economies could be impaired if interest rates are driven primarily by global factors, especially during periods of large capital inflows. The main objective of this paper is to assess whether this is true for emerging Asia's economies. Using a dynamic factor model and a structural vector auto-regression model, we show that long-term interest rates in Asia are indeed predominantly driven by global factors. However, monetary policy transmission mechanism remains effective in the region, as it operates predominantly through short-term interest rates. Nevertheless, the monetary transmission mechanism, though effective, is somewhat weaker in Asia during the periods of surges in capital inflows. Mode of access: Internet Unsal, Filiz. IMF Working Papers; Working Paper ; No. 2012/265 Full text available on IMF http://elibrary.imf.org/view/journals/001/2012/265/001.2012.issue-265-en.xml IMF e-Library