Work

Asymmetries in the international spillover effects of monetary policy: Based on TGVAR model

Year: 2023

Type: article

Abstract: Based on the TGVAR framework, this study examined the asymmetrical global spillover effects in the major areas and countries. Our analysis makes the case that the asymmetries in monetary policy are primarily caused by heterogeneity in monetary policy tool shocks, regional and macroeconomic target responses, and disparities in economic conditions and international position among nations. Our findings demonstrate that emerging economies are more vulnerable to monetary policy spillover effects than advanced economies for both quantity-based and price-based monetary policies. Our research also reveals that while the spillover effects on inflation varied considerably, the effects on real GDP are more closely impacted. Without countermeasures, a shock resulting in a uniform cutting of short-term interest rates might cause a recession in the majority of economies while a shock resulting in a rise in the broad money supply could trap some economies in stagflation.

Source: The North American Journal of Economics and Finance

DOI: 10.1016/j.najef.2023.102029

Authors: Baisheng Cui, Jiaqi Li, Yi Zhang

Institution: Shanghai Normal University

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $2,540

Funders: National Office for Philosophy and Social Sciences, National Social Science Fund of China