TY - BOOK ID - 134171011 TI - Why Follow the Fed? Monetary Policy in Times of US Tightening PY - 2022 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Macroeconomics KW - Economics: General KW - Money and Interest Rates: General KW - Monetary Policy, Central Banking, and the Supply of Money and Credit: General KW - International Finance: General KW - Open Economy Macroeconomics KW - International Policy Coordination and Transmission KW - International Business Cycles KW - Economic & financial crises & disasters KW - Economics of specific sectors KW - Currency crises KW - Informal sector KW - Economics KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:134171011 AB - I conduct interviews with 32 Central Bankers from Emerging Markets and present five unifying themes that explain their behavior when reacting to a U.S. monetary tightening. I then estimate the impulse response functions of their two main monetary tools, the policy rate and foreign exchange interventions, to an increase in the U.S. rate, using the answers from the interviews as a guide for the best econometric specification. I find that most Central Banks react to a U.S. tightening by raising domestic rates, regardless of the exchange rate regime, but their reasons for doing so vary – from controlling inflation to preventing capital outflows. ER -