The open economy consequences of U.S. monetary policy

John Bluedorn and Christopher Bowdler ()

Journal of International Money and Finance, 2011, vol. 30, issue 2, 309-336

Abstract: We consider the open economy consequences of U.S. monetary policy, extending the identification approach of Romer and Romer (2004) and adapting it for use with asset prices. Intended policy changes are orthogonalized against the economy's expected future path, which captures any effects from open economy variables. Estimated from a set of bilateral VARs, the dynamic responses of the exchange rate, foreign interest rate, and foreign output are consistent with recent work that identifies U.S. policy via futures market changes and a priori impulse response bounds. We compare the two approaches, finding important commonalities. We also outline some advantages of our approach.

Keywords: Open; economy; monetary; policy; identification; Exchange; rate; adjustment; Interest; rate; pass-through (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (35)

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Related works:
Working Paper: The Open Economy Consequences of U.S. Monetary Policy (2006)
Working Paper: The Open Economy Consequences of U.S. Monetary Policy (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:30:y:2011:i:2:p:309-336

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