2025/08/05 by Maximilian Boeck, Lorenzo Mori · 1 voice · 1 citation
Economics, Econometrics and Finance · #Global Financial Crisis and Policies #Monetary Policy and Economic Impact #Economic Theory and Policy
paper · doi:10.1016/j.jinteco.2025.104139
openalex publication_date 2025/08/05 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/27
We estimate a time-varying parameter vector autoregression to examine the evolution of international spillovers of U.S. monetary policy in light of increasing globalization in real and financial markets. We find that the adverse international effects of a U.S. tightening have substantially increased over the past three decades, peaking during the Great Recession before stabilizing – a timing that aligns well with observed trends in globalization and slowbalization dynamics. Cross-country analysis and counterfactual simulations suggest that the estimated amplification of the spillover effects over time has been primarily driven by the surge in trade integration, while rising financial integration has contributed only modestly.