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Openness and the Strength of Monetary Transmission: International Evidence

Author

Listed:
  • Bruno Ćorić

    (University of Split, Faculty of Economics, Split, Croatia)

  • Lena Malešević Perović

    (University of Split, Faculty of Economics, Split, Croatia)

  • Vladimir Šimić

    (University of Split, Faculty of Economics, Split, Croatia)

Abstract

This study explores cross-country variations in the size of the effects of a monetary policy shock on output using the sample of 48 developed and developing countries. The structural vector autoregression model is used to estimate monetary policy effects for each country separately. Based on the estimated impulse responses, we construct a measure of the short-run monetary policy effect on output, which is used as the dependent variable in a cross-country regression. Our results suggest that the effects of monetary policy shock on output are significantly influenced by trade openness, exchange rate regime, correlation with the US and for European countries with the German economy, and the development of the banking sector.

Suggested Citation

  • Bruno Ćorić & Lena Malešević Perović & Vladimir Šimić, 2016. "Openness and the Strength of Monetary Transmission: International Evidence," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 66(4), pages 639-659, December.
    • Handle: RePEc:aka:aoecon:v:66:y:2016:i:4:p:639-659
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    Cited by:

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    2. Ferdinand Ahiakpor & William Cantah & William Brafu-Insaidoo & Eric Bondzie, 2019. "Trade Openness and Monetary Policy in Ghana," International Economic Journal, Taylor & Francis Journals, vol. 33(2), pages 332-349, April.

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    More about this item

    Keywords

    monetary policy effects; exchange rate regime; trade openness; international interdependence;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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