U.S. Monetary Policy and the Global Financial Cycle

2020/05/01 by Silvia Miranda‐Agrippino, Hélène Rey · 9 citations
Economics, Econometrics and Finance · #Global Financial Crisis and Policies #Monetary Policy and Economic Impact #Banking stability, regulation, efficiency

paper · pdf · doi:10.1093/restud/rdaa019

openalex publication_date 2020/05/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/31

Abstract

Abstract U.S. monetary policy shocks induce comovements in the international financial variables that characterize the “Global Financial Cycle.” A single global factor that explains an important share of the variation of risky asset prices around the world decreases significantly after a U.S. monetary tightening. Monetary contractions in the US lead to significant deleveraging of global financial intermediaries, a decline in the provision of domestic credit globally, strong retrenchments of international credit flows, and tightening of foreign financial conditions. Countries with floating exchange rate regimes are subject to similar financial spillovers.

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