The Transmission of International Monetary Policy Shocks to Firms’ Expectations
Serafin Frache,
Rodrigo Lluberas,
Mathieu Pedemonte and
Javier Turén
No 14286, IDB Publications (Working Papers) from Inter-American Development Bank
Abstract:
Motivated by the dominant role of the US dollar, we explore how monetary policy (MP) shocks in the United States can affect a small open economy through the expectation channel. We combine data from a panel survey of firms' expectations in Uruguay with granular information about firms' debt position. We show that a contractionary MP shock in the United States reduces firms' inflation and cost expectations in Uruguay. This result contrasts with the effect of this shock on the Uruguayan economy. We study mechanisms related to how firms and managers experience in different monetary policy regimes can explain the results and discuss their implications.
Keywords: Firms’ expectations; Global financial cycle; Monetary policy spillovers (search for similar items in EconPapers)
JEL-codes: D84 E31 E58 E71 F41 (search for similar items in EconPapers)
Date: 2025-09
New Economics Papers: this item is included in nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:14286
DOI: 10.18235/0013709
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