A Tale of Two Global Monetary Policies

Silvia Miranda-Agrippino and Tsvetelina Nenova ()

No 2117, Discussion Papers from Centre for Macroeconomics (CFM)

Abstract: US monetary policy is not the only one with a global reach. We compare the international financial spillovers of the unconventional monetary policies of the Fed and the ECB. Monetary policy tightenings in both areas are followed by a global retrenchment in capital flows, a fall in global stock markets, and a rise in global risk measures. Thus, ECB and Fed monetary policies propagate internationally through equivalent transmission channels. ECB monetary policy shocks also affect significantly the US business and financial cycles. We produce tentative evidence that links the strength of the ECB international spillovers to the Euro exposure for both trade invoicing and the pricing of financial transactions.

Keywords: Monetary Policy; Global Financial Cycle; International spillovers; Currency Pricing Paradigm; Fed; ECB (search for similar items in EconPapers)
JEL-codes: E52 F42 G15 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2021-08
New Economics Papers: this item is included in nep-mon, nep-opm and nep-pay
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: A tale of two global monetary policies (2022)
Working Paper: A tale of two global monetary policies (2022)
Working Paper: A Tale of Two Global Monetary Policies (2022)
Chapter: A Tale of Two Global Monetary Policies (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:cfm:wpaper:2117

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