The International Transmission of U.S. Monetary Policy: New Evidence from Trade Data

Shu Lin and Haichun Ye
Additional contact information
Shu Lin: Fudan University and Hong Kong Institute for Monetary Research

No 82015, Working Papers from Hong Kong Institute for Monetary Research

Abstract: We make the first attempt in the literature to empirically examine the spillover effects of U.S. monetary policy on trade in other countries. In a large sector-level bilateral trade dataset of 137 countries for the years 1970-2000, we find strong and robust evidence supporting an international credit channel of U.S. monetary policy transmission. We show that: 1) financially more constrained sectors have a more negative exposure of their trade to a tight U.S. monetary policy; 2) this international credit channel works mainly during significant U.S. monetary tightening periods (e.g., a large increase in interest rates); 3) the negative impact of a tight U.S. policy is significantly stronger in financially less developed countries or countries with no monetary autonomy.

Keywords: International Transmission of U.S. Monetary Policy; Trade; Credit Constraints; Credit Channel (search for similar items in EconPapers)
JEL-codes: E44 E52 F14 F33 F42 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2015-04
New Economics Papers: this item is included in nep-cba, nep-ifn, nep-int, nep-mac, nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.hkimr.org/uploads/publication/414/wp-no-08_2015-final-.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.hkimr.org/uploads/publication/414/wp-no-08_2015-final-.pdf [301 Moved Permanently]--> http://www.aof.org.hk/research/HKIMR/uploads/publication/414/wp-no-08_2015-final-.pdf [301 Moved Permanently]--> https://www.aof.org.hk/research/HKIMR/uploads/publication/414/wp-no-08_2015-final-.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hkm:wpaper:082015

Access Statistics for this paper

More papers in Working Papers from Hong Kong Institute for Monetary Research Contact information at EDIRC.
Bibliographic data for series maintained by HKIMR ().