CEF.UP - ECO Seminar | Webinar

Thursday, December 15th 2022 | 1:00 pm | room 305 | online

“The Global Transmission of U.S. Monetary Policy” 

“The US monetary policy propagates internationally by affecting external  demand and due to the role of the dollar as the world’s dominant  currency in financial markets, trade invoicing, and foreign exchange  reserves. We quantify spillover effects by employing a state-of-the-art  high-frequency identification and big data techniques, in conjunction  with a harmonised dataset covering 30 economies and over 150,000  data-points. We report three novel stylised facts. First, a US monetary  policy tightening has large and qualitatively homogeneous real and  nominal contractionary spillovers onto both advanced and emerging  economies. Second, flexible exchange rates cannot fully insulate  domestic economies. Movements in risk premia limit central banks’  ability to control the yield curve, even in advanced economies. Third,  financial channels dominate over demand and exchange rate channels in  the transmission to real variables, while the transmission via oil and  commodity prices determines nominal spillovers. The latter is an  important novel channel not previously reported in the literature.”

For more information please contact cefup.sec@fep.up.pt.



“Cef.up is financed by Portuguese public funds through FCT - Fundação para a Ciência e Tecnologia, I.P., in the framework of the project with reference UIDB/04105/2020”