Global spillovers and domestic monetary policy
No 436, BIS Working Papers from Bank for International Settlements
I discuss how the unconventional monetary policy measures implemented over the past several years – quantitative and credit easing, and forward guidance – can be analysed in the context of conventional models of asset prices, with particular reference to exchange rates. I then discuss alternative approaches to interpreting the effects of such policies, and review the empirical evidence. Finally, I examine the ramifications for thinking about the impact on exchange rates and asset prices of emerging market economies. I conclude that although the implementation of unconventional monetary policy measures may introduce more volatility into global markets, in general it will support global rebalancing by encouraging the revaluation of emerging market currencies.
Keywords: Balance sheet; money supply; portfolio balance; forward guidance; yield curve; spreads; signaling; capital flows; rebalancing (search for similar items in EconPapers)
Pages: 42 pages
New Economics Papers: this item is included in nep-ifn, nep-mac, nep-mon and nep-opm
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Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:436
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