Recent Findings in Investment Described by Researchers from Federal Reserve Bank (Us Monetary Spillovers To Emerging Markets: Both Policy Drivers and Vulnerabilities Matter): Investment

2026 AUG 03 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Current study results on Investment have been published. According to news reporting from New York City, New York, by NewsRx journalists, research stated, “How do U.S. monetary tightening shocks affect emerging market economies, and how does the impact depend on these economies’ own macroeconomic vulnerabilities? We examine this question in a model that combines financial frictions with imperfect anchoring of inflation expectations, a key vulnerability in emerging markets.”

The news correspondents obtained a quote from the research from Federal Reserve Bank, “The degree of anchoring is disciplined using evidence that inflation expectations in emerging markets respond significantly to inflation surprises. Imperfect anchoring amplifies the contractionary effects of U.S. monetary shocks on emerging markets but also generates increases in inflation and nominal interest rates, patterns that we show are consistent with the empirical evidence but are not well explained by existing models.”

According to the news reporters, the research concluded: “Our analysis also distinguishes between the drivers of U.S. policy tightenings. U.S. interest rate hikes resulting from stronger demand, rather than exogenous policy shocks, lead to modestly positive spillovers for emerging markets with well-anchored inflation expectations, but to substantial slowdowns in those with less-well-anchored expectations.”

This research has been peer-reviewed.

For more information on this research see: Us Monetary Spillovers To Emerging Markets: Both Policy Drivers and Vulnerabilities Matter. Journal of International Economics, 2026;162. Journal of International Economics can be contacted at: Elsevier, Radarweg 29, 1043 Nx Amsterdam, Netherlands. (Elsevier - www.elsevier.com; Journal of International Economics - http://www.journals.elsevier.com/journal-of-international-economics/)

Our news journalists report that additional information may be obtained by contacting Ozge Akinci, Federal Reserve Bank, New York, NY 10045, United States. Additional authors for this research include Shaghil Ahmed and Albert Queralto.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.jinteco.2026.104288. 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.

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