NGARIE WOOD and GEOFFREY GERTZ of Oxford University argue
for a more internationally oriented Fed:
CNBC Interview - RBI Chief Raghu Rajan
Meanwhile,
Niranjan Rajadhyaksha observes:
“ … It must be
remembered that the unconventional monetary policy that the US has pursued
since 2009 is part of a broad global stimulus programme put in place by the
heads of important governments after the world economy was nearly brought to
its knees after the global financial crisis. This is what the joint statement
of leaders of 20 nations after their April 2009 meeting in London said: “We
will conduct all our economic policies cooperatively and responsibly with
regard to the impact on other countries and will refrain from competitive
devaluation of our currencies and promote a stable and well-functioning
international monetary system.”
The emerging markets
are essentially complaining that the spirit of cooperation that was central to
the stimulus should also be part of the exit strategy. The US is behaving in an
asymmetric manner. There is also enough empirical evidence that unconventional
monetary policy pursued by the Western central banks has indeed had an impact
on emerging market economies through pro-cyclical capital flows, currency
appreciations and asset price bubbles. The opposite effect—currency
depreciations and falling asset prices—are thus inevitable risks during the
ongoing QE taper.”