Discussion paper

DP16134 Making waves: Monetary policy and its asymmetric spillovers in a globalised world

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 (US). Fed monetary policy shocks also affect real and financial variables in the rest of the world more than ECB monetary policy shocks.

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Citation

Ca’Zorzi, M, L Dedola, G Georgiadis, M Jarociński, L Stracca and G Strasser (eds) (2021), “DP16134 Making waves: Monetary policy and its asymmetric spillovers in a globalised world”, CEPR Press Discussion Paper No. 16134. https://new.cepr.org/publications/dp16134