Spillover Implications of Differences in Monetary Conditions in the United States and the Euro Area

Carolina Osorio-Buitron and Esteban Vesperoni

No 2016/001, IMF Spillover Notes from International Monetary Fund

Abstract: This report analyzes the possible spillover effects that could result if the U.S. normalizes its monetary policy while euro area countries are increasing monetary stimulus (a situation referred to as asynchronous monetary conditions). This analysis identifies country-specific shocks to economic activity and monetary conditions since the early 1990s, finding that real and monetary conditions in the United States and the euro area have oftentimes been asynchronous and have often resulted in significant spillover effects, particularly since early 2014.

Keywords: SN; euro area; euro; monetary policy; currency; exchange rate; Euro area shock; money U.S.; euro vis-à-vis; Euro area yield; money shock; Spillovers; Bond yields; Exchange rates; Monetary tightening; Asset prices; Global; spillover implication; Euro AreaSpillover Implications of difference; conditions in the United States; spillover implications of difference; area to the United States; Area country (search for similar items in EconPapers)
Pages: 34
Date: 2016-09-27
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