External authors

Gianluca Benigno

Associate Professor in the Department of Economics at the London School of Economics

Gianluca Benigno is Associate Professor in the Department of Economics at the London School of Economics. He gained his PhD in International Macroeconomics from the University of California at Berkeley. He has published on exchange rate economics, international monetary policy cooperation, monetary and fiscal policy. He has consulted for the IMF and was a Senior Economist at the Federal Reserve Bank of New York and an Economist at the Bank of England.

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Opinion

Credible emerging market central banks could embrace quantitative easing to fight COVID-19

Emerging economies are fighting COVID-19 and the economic sudden stop imposed by the containment and lockdown policies, in the same way as advanced economies. However, emerging markets also face large and rapid capital outflows as a result of the pandemic. This column argues that credible emerging market central banks could rely on purchases of local currency government bonds to support the needed health and welfare expenditures and fiscal stimulus. In countries with flexible exchange rate regimes and well-anchored inflation expectations, such quantitative easing would help ease financial conditions, while minimising the risks of large depreciations and spiralling inflation.

By: Gianluca Benigno, Jon Hartley, Alicia García-Herrero, Alessandro Rebucci and Elina Ribakova Topic: Global Economics & Governance Date: July 6, 2020