Currency Wars? Unconventional Monetary Policy Does Not Stimulate Exports

Andrew Rose

No 24817, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: I investigate whether countries that use unconventional monetary policy (UMP) experience export booms. I use a popular gravity model of trade which requires neither the exogeneity of UMP, nor instrumental variables for UMP. In practice, countries that engage in UMP experience a drop in exports vis-á-vis countries that are not engaged in such policies, holding other things constant. Quantitative easing is associated with exports that are about 10% lower to countries not engaged in UMP; this amount is significantly different from zero and similar to the effect of negative nominal interest rates. Thus, there is no evidence that countries have gained export markets through unconventional monetary policy; currency wars that have been launched have also been lost. UMP is also associated with a comparable drop in imports and exchange rates, suggesting that countries engage in UMP when they are experiencing adverse macroeconomic shocks concurrent with those that eviscerate international trade.

JEL-codes: E58 F14 (search for similar items in EconPapers)
Date: 2018-07
New Economics Papers: this item is included in nep-cba, nep-ifn, nep-int, nep-mac and nep-mon
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Citations: View citations in EconPapers (8)

Published as Andrew K. Rose, 2021. "Currency Wars? Unconventional Monetary Policy Does Not Stimulate Exports," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 53(5), pages 1079-1096, August.

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Related works:
Journal Article: Currency Wars? Unconventional Monetary Policy Does Not Stimulate Exports (2021)
Working Paper: Currency Wars? Unconventional Monetary Policy Does Not Stimulate Exports (2017)
Working Paper: Currency Wars? Unconventional Monetary Policy Does Not Stimulate Exports (2017)
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