Brahmbhatt, MilanCanuto, OtavianoGhosh, Swati2012-08-132012-08-132010-12https://hdl.handle.net/10986/10116An energetic debate on the danger of a global currency war has flared up in recent months, stoked by a renewed move to 'quantitative easing' in the United States, resurgent capital flows to developing countries and strong upward pressure on emerging market currencies. This economic premise views some of the arguments and concludes that the current United States monetary easing is a useful insurance policy against the risk of global deflation. But it is increasing pressure on developing countries to move toward greater monetary policy autonomy and exchange rate flexibility, as well as to undertake the institutional and structural policies needed to underpin such flexibility. Such reforms will take time.CC BY 3.0 IGOADMINISTRATIVE CONTROLSADVANCED COUNTRYAGGREGATE DEMANDASYMMETRIC INFORMATIONAUTONOMOUS MONETARY POLICYBALANCE OF PAYMENTSBANKING SECTORBANKRUPTCIESBONDBOND SPREADSBOND YIELDSCAPITAL ALLOCATIONCAPITAL CONTROLCAPITAL CONTROLSCAPITAL FLOWSCAPITAL INFLOWSCAPITAL MARKETSCENTRAL BANKCENTRAL BANKSCOLLATERALCOMPETITIVE DEVALUATIONCOMPETITIVE DEVALUATIONSCOMPETITIVENESSCONSUMER PRICE INFLATIONCORE INFLATIONCORPORATE PROFITSCREDIBILITYCREDIT RATIONINGCREDIT SPREADSCREDITORSCURRENCYCURRENT ACCOUNTCURRENT ACCOUNT DEFICITDEBTDEBTSDEFLATIONDEPRESSIONDEVELOPING COUNTRIESDEVELOPING ECONOMIESDEVELOPMENT STRATEGYDISINFLATIONDOMESTIC BONDSDOMESTIC DEMANDDOMESTIC INTEREST RATESECONOMIC CRISISECONOMIC HISTORYECONOMIC OUTLOOKECONOMIC REVIEWEMERGING MARKETEMERGING-MARKETEXCHANGE RATEEXCHANGE RATE FLEXIBILITYEXPORTSEXTERNAL BORROWINGFEDERAL RESERVEFEDERAL RESERVE BANKFINANCIAL DISTRESSFINANCIAL FRAGILITYFINANCIAL INSTITUTIONSFINANCIAL MARKETSFINANCIAL SECTORFINANCIAL STABILITYFISCAL POLICYFIXED EXCHANGE RATEFIXED EXCHANGE RATE PEGFIXED EXCHANGE RATE REGIMEFLEXIBLE EXCHANGE RATEFLEXIBLE EXCHANGE RATESFOREIGN EXCHANGEFOREIGN EXCHANGE MARKETFULL EMPLOYMENTGDPGLOBAL CURRENCYGLOBAL DEMANDGLOBAL ECONOMYGLOBAL FINANCIAL STABILITYGLOBAL IMBALANCESGLOBAL TRADEGLOBALIZATIONGOLDGOLD STANDARDGOVERNMENT BONDSGOVERNMENT SECURITIESGROSS DOMESTIC PRODUCTGROWTH POLICYGROWTH POTENTIALGROWTH VOLATILITYHIGH INFLATIONIMBALANCESIMPLICIT SUBSIDYIMPORTINDEPENDENT MONETARY POLICIESINDEPENDENT MONETARY POLICYINFLATION EXPECTATIONSINFLATION RATEINFLATIONARY EXPECTATIONSINFLATIONARY PRESSURESINSTRUMENTINSURANCEINSURANCE POLICYINTEREST RATEINTEREST RATE SPREADSINTERNATIONAL FINANCIAL INTEGRATIONINTERNATIONAL MARKETSLIBERALIZATIONLIBERALIZATIONSLIMITED EXCHANGE RATE FLEXIBILITYLIQUIDITYLOCAL MARKETSLONG-TERM GOVERNMENT SECURITIESLONG-TERM INTERESTLONG-TERM INTEREST RATESLOSS OF COMPETITIVENESSMACRO POLICYMACROECONOMIC POLICIESMACROECONOMIC POLICYMARKET COUNTRIESMATURITIESMATURITYMATURITY STRUCTUREMONETARY AUTONOMYMONETARY ECONOMICSMONETARY FUNDMONETARY POLICYMONETARY POLICY AUTONOMYMONEY GROWTHMONEY SUPPLYMULTILATERAL TRADENOMINAL INTEREST RATENOMINAL INTEREST RATESOPEN CAPITAL ACCOUNTOPEN CAPITAL ACCOUNTSOUTPUTOUTPUT GAPSPOLICY OPTIONSPOLICY REFORMPOLICY RESPONSEPOLITICAL ECONOMYPOTENTIAL OUTPUTPOVERTY REDUCTIONPRICE STABILITYPROTECTIONISMREAL EXCHANGEREAL EXCHANGE RATEREAL EXCHANGE RATESREAL GROSS DOMESTIC PRODUCTREAL INTERESTREAL INTEREST RATESRECESSIONREGULATORY REFORMRESERVE REQUIREMENTSRETURNSAFETY NETSSHORT-TERM INTEREST RATESHORTFALLSPECULATIVE BUBBLESSTRUCTURAL POLICIESTAXTRADABLE GOODSTRADE DEFICITTRADE POLICYTRADINGTRADING PARTNERSTREASURYTREASURY BONDSUNEMPLOYMENTUPWARD PRESSUREVOLATILITYVOLUME OF FLOWSWAGESWORLD TRADEWorld Bank10.1596/10116