Investigators at University of Southern California (USC) Report Findings in Investment (The Performance of Emerging Markets During the Fed’s Easing and Tightening Cycles: a Cross-country Resilience Analysis): Investment

Economics Daily Report

2024 OCT 08 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Research findings on Investment are discussed in a new report. According to news reporting originating from Los Angeles, California, by NewsRx correspondents, research stated, “We investigate the determinants of emerging markets performance during five U.S. Federal Reserve monetary tightening and easing cycles during 2004-2023.”

Our news editors obtained a quote from the research from the University of Southern California (USC), “We study how macroeconomic and institutional conditions of an Emerging Market (EM) at the beginning of a cycle explain EM resilience during each cycle. More specifically, our baseline cross-sectional regressions examine how those conditions affect three measures of resilience, namely bilateral exchange rate against the USD, exchange rate market pressure, and country-specific Morgan Stanley Capital International index (MSCI). We then stack the five cross-sections to build a panel database to investigate potential asymmetry between tightening versus easing cycles. Our evidence indicates that macroeconomic and institutional variables are associated with EM performance, determinants of resilience differ during tightening versus easing cycles, and institutions matter more during difficult times. Our specific findings are largely consistent with economic intuition.”

According to the news editors, the research concluded: “For instance, we find that current account balance, international reserves, and inflation are all important determinants of EM resilience.”

This research has been peer-reviewed.

For more information on this research see: The Performance of Emerging Markets During the Fed’s Easing and Tightening Cycles: a Cross-country Resilience Analysis. Journal of International Money and Finance, 2024;148. Journal of International Money and Finance can be contacted at: Elsevier Sci Ltd, 125 London Wall, London, England. (Elsevier - www.elsevier.com; Journal of International Money and Finance - http://www.journals.elsevier.com/journal-of-international-money-and-finance/)

The news editors report that additional information may be obtained by contacting Joshua Aizenman, University of Southern California (USC), Dockson Chair Econ & Int Relat, Los Angeles, CA 90089, United States. Additional authors for this research include Donghyun Park, Irfan A. Qureshi, Jamel Saadaoui and Gazi Salah Uddin.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.jimonfin.2024.103169. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.