We study the effects of Chinese monetary policy shocks on China's major trading partners in East and South-East Asia by estimating structural vector autoregressive (SVAR) models for six economies in the region. We find that a monetary expansion in Mainland China leads to an increase in real GDP...

Adverse foreign output shocks have a sizable impact on the welfare of small open economies. Therefore, one of the key roles of monetary policy in those economies is to minimize the welfare losses arising from such shocks. To assess the welfare impact of external shocks under different monetary...