COVID-19 and Monetary Policy with Zero Bounds: A Cross-Country Investigation

Hakan Yilmazkuday

No 2112, Working Papers from Florida International University, Department of Economics

Abstract: Using daily data on policy rates from 28 advanced economies and 32 emerging markets, this paper investigates the monetary policy reaction function of central banks during the Coronavirus Disease 2019 (COVID-19) outbreak. The results show that emerging markets or countries without a zero bound on their interest rates were able to reduce interest rates as a reaction to reduced economic activity and to the volatility in their exchange rates, whereas advanced economies or countries with a zero bound on their interest rates were not. Several policy implications follow for countries with a zero bound on their interest rates amid COVID-19.

Keywords: COVID-19; Coronavirus; Monetary Policy; Reaction Function; Google Mobility; Exchange Rate (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2021-05
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://economics.fiu.edu/research/pdfs/2021_working_papers/2112.pdf First version, 2021 (application/pdf)

Related works:
Journal Article: COVID-19 and Monetary policy with zero bounds: A cross-country investigation (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fiu:wpaper:2112

Access Statistics for this paper

More papers in Working Papers from Florida International University, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sheng Guo ().