The Global Transmission of U.S. Monetary Policy

Riccardo Degasperi (), Seokki Hong and Giovanni Ricco ()

No 2023-02, Working Papers from Center for Research in Economics and Statistics

Abstract: US monetary policy shapes economic conditions globally due to the dominant role of the dollar in the world economy. We study the propagation of US monetary policy shocks abroad using a state-of-the-art high-frequency identification and a harmonised dataset covering 30 economies and over 150,000 datapoints. A policy tightening has large contractionary effects on both advanced and emerging economies. The propagation via financial variables limits foreign central banks’ control over domestic economic conditions by increasing risk premia and by destabilising the medium-long segment of the yield curve. The responses of headline prices abroad are instead shaped by spillovers via commodity markets.

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)
Pages: 76 pages
Date: 2023-01-13
New Economics Papers: this item is included in nep-cba, nep-ifn, nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: The global transmission of U.S. monetary policy (2024)
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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