The International Transmission of U.S. Monetary Policy: New Evidence from Trade Data
We make the first attempt in the literature to empirically examine the spillover effects of U.S. monetary policy on trade in other countries. In a large sector-level bilateral trade dataset of 137 countries for the years 1970-2000, we find strong and robust evidence supporting an international credit channel of U.S. monetary policy transmission. We show that: 1) financially more constrained sectors have a more negative exposure of their trade to a tight U.S. monetary policy; 2) this international credit channel works mainly during significant U.S. monetary tightening periods (e.g., a large increase in interest rates); 3) the negative impact of a tight U.S. policy is significantly stronger in financially less developed countries or countries with no monetary autonomy.
Year of publication: |
2015-04
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Authors: | Lin, Shu ; Ye, Haichun |
Institutions: | Hong Kong Institute for Monetary Research (HKIMR), Government of Hong Kong |
Subject: | International Transmission of U.S. Monetary Policy | Trade | Credit Constraints | Credit Channel |
Saved in:
freely available
Extent: | application/pdf |
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Series: | |
Type of publication: | Book / Working Paper |
Notes: | Number 082015 29 pages |
Classification: | E52 - Monetary Policy (Targets, Instruments, and Effects) ; E44 - Financial Markets and the Macroeconomy ; F14 - Country and Industry Studies of Trade ; F33 - International Monetary Arrangements and Institutions ; F42 - International Policy Coordination and Transmission |
Source: |
Persistent link: https://www.econbiz.de/10011265970
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