10/04/2026
In a new post on the Asia Economics Blog, Abhishek Kumar explains why monetary tightening can lead to rising inflation in Asian economies.
In theory, an exogenous increase in the policy interest rate should lead to a decline in inflation, assuming the demand side effects dominate the supply side effects. However, for emerging market economies many empirical studies based on structural vector autoregressions (SVARs) find that an increas...