Garima Vasishtha is a Senior Policy Advisor in the International Economic Analysis Department. In this role, she leads the department’s contribution to the Bank of Canada’s Monetary Policy Report (MPR). In addition, she conducts research and analysis on current economic issues in the broad fields of international finance and open economy macroeconomics. She is an applied macroeconomist and has conducted research on issues related to the transmission of international shocks, sovereign spreads in emerging markets, and capital flows to emerging market economies.
Garima began her career at the Bank of Canada in 2007 as a Senior Analyst in the Global Issues Division in the International Economic Analysis Department. Since then she has assumed increasing responsibilities in her roles as a Principal Researcher, Assistant Chief, and most recently as the Senior Policy Advisor in the same department. She holds a Ph.D. in International Economics from the University of California, Santa Cruz.
Emerging-market economies have become increasingly important in driving global GDP growth over the past 10 to 15 years. This has made timely and accurate assessment of current and future economic activity in emerging markets important for policy-makers not only in these countries but also in advanced economies.
Empirical work on the underlying causes of the recent dislocations in bank-intermediated trade finance has been limited by the poor availability of hard data. This paper analyzes the key determinants of bank-intermediated trade finance using a novel data set covering ten banking jurisdictions.
While quantitative easing (QE) in the United States likely increased capital flows to emerging-market economies (EMEs), putting upward pressure on asset prices and exchange rates, diverging fundamentals between advanced economies and EMEs were also important drivers. Evidence suggests that the benefits of QE to EMEs, in higher global demand and increased confidence, appear to outweigh the costs. When advanced economies begin to normalize monetary policy, the best defence for EMEs against any potential instability is likely to be further strengthening of their macroeconomic and financial policy frameworks.
Demand for industrial raw materials from emerging economies, particularly emerging Asia, is widely believed to have fueled the surge in oil and industrial commodity prices during 2002-2008. The paper first presents a simple storage model in which commodity prices respond to market participant’s changing expectations of the future macroeconomic environment.