Jul 2022

14:15 - 15:45
IWH Research Seminar

Global Implications of Multi-dimensional US Monetary Policy Normalization

Georgios Georgiadis  (Europäische Zentralbank)
IWH, conference room and via Zoom
Georgios Georgiadis

Zur Person

Georgios Georgiadis is Principal Economist at the European Central Bank. His fields of interest are Macroeconomics and Monetary Economics and International Economics.

"This paper assesses global spillovers from US monetary policy simultaneously accounting for unconventional measures and central bank information effects as well as non-linearities. Findings novel to the literature are: (i) not accounting for central bank information effects produces counterintuitive spillover estimates; (ii) forward guidance and asset purchase shocks spill over to the rest of the world, while conventional monetary policy shocks are less important; (iii) Fed forward guidance induces policy trade-offs that underlie ‘fear-of-floating’ in emerging market economies and are amplified by recipient-economy vulnerabilities; (iv) emerging market economies are more responsive to Delphic shocks, as their currencies are more sensitive to ’risk-on/off’ effects, and their movements activate the Bruno and Shin (2015) risk-taking channel; (v) spillovers from US monetary policy tightenings are small when they occur during business cycle expansions. Our findings suggest that if the post-COVID US monetary policy normalization is communicated well it may entail only limited adverse spillovers to the world economy overall.".

To join the lecture via ZOOM, please contact Alessandro Sardone.

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