The global transmission of U.S. monetary policy

Riccardo Degasperi (), Seokki Simon Hong () and Giovanni Ricco ()
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Seokki Simon Hong: Paris School of Economics

No 1466, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: US monetary policy impacts global economic conditions, with tightenings causing recessions worldwide. We employ a state-of-the-art identification of monetary policy shocks and a comprehensive dataset covering 30 advanced and emerging economies to estimate the international spillover effects of US monetary policy. We report the existence of a novel transmission channel, mediated by commodity and oil prices, by which tightenings exert downward pressure on inflation globally. Furthermore, we find that financial channels are crucial for the transmission of the shock to real variables, as they hamper foreign central banks' control over domestic conditions by impairing the transmission of countercyclical monetary policy to the medium-long end of the yield curve.

Keywords: monetary policy; trilemma; exchange rates; monetary policy spillovers (search for similar items in EconPapers)
JEL-codes: C3 E5 F3 F4 (search for similar items in EconPapers)
Date: 2024-10
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: The Global Transmission of U.S. Monetary Policy (2023)
Working Paper: The global transmission of U.S. monetary policy (2021)
Working Paper: The Global Transmission of U.S. Monetary Policy (2020)
Working Paper: The Global Transmission of U.S. Monetary Policy (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_1466_24

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