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Making Waves: Monetary Policy and Its Asymmetric Transmission in a Globalized World

Author

Listed:
  • Michele Ca’ Zorzi

    (European Central Bank)

  • Luca Dedola

    (European Central Bank)

  • Georgios Georgiadis

    (European Central Bank)

  • Marek Jarocinski

    (European Central Bank)

  • Livio Stracca

    (European Central Bank)

  • Georg Strasser

    (European Central Bank)

Abstract

This paper compares the international transmission of European Central Bank (ECB) and Federal Reserve System (Fed) monetary policy in a unified framework, identifying pure monetary policy shocks purged of bias from central bank information effects. The estimates reveal a stark asymmetry in the global spillovers from ECB and Fed monetary policy: Fed monetary policy shocks have a significant impact on euro-area financial conditions and real activity, while ECB monetary policy shocks do not have a similar effect on the United States. Fed monetary policy shocks also affect real and financial variables in the rest of the world more than ECB monetary policy shocks.

Suggested Citation

  • Michele Ca’ Zorzi & Luca Dedola & Georgios Georgiadis & Marek Jarocinski & Livio Stracca & Georg Strasser, 2023. "Making Waves: Monetary Policy and Its Asymmetric Transmission in a Globalized World," International Journal of Central Banking, International Journal of Central Banking, vol. 19(2), pages 95-144, June.
    • Handle: RePEc:ijc:ijcjou:y:2023:q:2:a:2
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    References listed on IDEAS

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    2. Mistak, Jakub & Ozkan, F. Gulcin, 2024. "Asymmetric monetary policy spillovers: the role of supply chains, credit networks and fear of floating," Working Paper Series 2995, European Central Bank.
    3. Gökhan Ider & Alexander Kriwoluzky & Frederik Kurcz & Ben Schumann, 2024. "Friend, Not Foe - Energy Prices and European Monetary Policy," Discussion Papers of DIW Berlin 2089, DIW Berlin, German Institute for Economic Research.

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    More about this item

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F3 - International Economics - - International Finance
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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