US monetary policy and the global financial cycle

Miranda-Agrippino, S and Rey, H (2020) US monetary policy and the global financial cycle. Review of Economic Studies, 87 (6). pp. 2754-2776. ISSN 0034-6527 OPEN ACCESS

Abstract

US 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 US 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.

More Details

Item Type: Article
Subject Areas: Economics
Additional Information:

© 2020 Review of Economic Studies Ltd. This manuscript version is made available under the CC-BY 4.0 licence https://creativecommons.org/licenses/by/4.0/

Funder Name: European Research Council
Date Deposited: 17 Apr 2020 09:57
Date of first compliant deposit: 15 Apr 2020
Subjects: F > Financial markets
B > Business cycles
M > Monetary standards
Last Modified: 13 Nov 2020 16:40
URI: https://lbsresearch.london.edu/id/eprint/1400
More

Export and Share


Download

Published Version - Text
  • Available under License

Statistics

Altmetrics
View details on Dimensions' website

Downloads from LBS Research Online

View details

Actions (login required)

Edit Item Edit Item