International monetary policy spillovers in an asymmetric world monetary system - The United States and China

Kristina Spantig
Additional contact information
Kristina Spantig: Graduate Programme "Global Financial Markets"

No 2012-33, Global Financial Markets Working Paper Series from Friedrich-Schiller-University Jena

Abstract: The paper scrutinizes the spillover effects of expansionary monetary policies of a center economy to the macroeconomic policies of periphery countries, dependent on the exchange rate regime. In particular the impact of the US quantitative easing on the Chinese economy is analysed. The results suggest that the exchange rate regime plays a minor role in insulating the economies at the periphery of the world monetary system from monetary policy shocks in the center. The only exception is capital controls which enable the periphery countries, in particular China, to maintain a certain degree of monetary independence in the short run. In the long run a closer Chinese-European policy coordination is argued to create a counterbalance to the predominance of the US dollar in the currently asymmetric world monetary system. This would provide an incentive to the US to phase out undue monetary expansion.

Keywords: monetary policy; excess liquidity; spillovers; US; China (search for similar items in EconPapers)
JEL-codes: E31 E42 E52 E61 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-mac, nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://pubdb.wiwi.uni-jena.de/pdf/wp_hlj33-2012.pdf (application/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:hlj:hljwrp:33-2012

Access Statistics for this paper

More papers in Global Financial Markets Working Paper Series from Friedrich-Schiller-University Jena
Bibliographic data for series maintained by Marku Pasche ().