01853cas a2200241 a 4500 AALejournalIMF014671 230101c9999 xx r poo 0 0eng d 5.00 USD 9781498327220 1018-5941 BD-DhAAL BD-DhAAL Han, Fei. Measuring External Risks for Peru : Insights from a Macroeconomic Model for a Small Open and Partially Dollarized Economy / Fei Han. Washington, D.C. : International Monetary Fund, 2014. 1 online resource (24 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 This paper quantifies the effects of external risks for Peru, with particular attention to two major external risks, China's investment slowdown and the U.S. monetary policy tightening. In particular, a macroeconomic model for a small open and partially dollarized economy is developed and estimated for Peru to measure the risk spillovers, and simulate domestic macroeconomic responses in different scenarios with these two external risks. The simulation results suggest that Peru's output is vulnerable to both risks, particularly the U.S. monetary policy tightening. Simulations also highlight the importance of higher exchange rate flexiblity and a lower degree of dollarization, which could help mitigate the negative spillover effects of these external risks. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2014/161 Full text available on IMF http://elibrary.imf.org/view/journals/001/2014/161/001.2014.issue-161-en.xml IMF e-Library