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Global Footprints of Monetary Policy

Author

Listed:
  • Silvia Miranda-Agrippino

    (Bank of England
    CEPR
    Centre for Macroeconomics (CFM))

  • Tsvetelina Nenova

    (London Business School)

  • Helene Rey

    (London Business School
    CEPR
    NBER)

Abstract

We study the international transmission of the monetary policy of the two world's giants: China and the US. From East to West, the channels of global transmission differ markedly. US monetary policy shocks affect the global economy primarily through their effects on integrated financial markets, global asset prices, and capital ows. EMEs in particular see both a reduction in in ows and a surge in out ows when the market tide turns as a result of a US monetary contraction. Conversely, international trade, commodity prices and global value chains are the main channels through which Chinese monetary policy transmits worldwide. AEs with a strong manufacturing sector are particularly sensitive to these disturbances.

Suggested Citation

  • Silvia Miranda-Agrippino & Tsvetelina Nenova & Helene Rey, 2020. "Global Footprints of Monetary Policy," Discussion Papers 2004, Centre for Macroeconomics (CFM).
    • Handle: RePEc:cfm:wpaper:2004
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Monetary policy; Global financial cycle; International pillovers; US; China;
    All these keywords.

    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
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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