International monetary transmission to the Euro area: Evidence from the U.S., Japan and China

Joaquin Vespignani and Ronald Ratti

MPRA Paper from University Library of Munich, Germany

Abstract: There are marked differences in the effect of increases in monetary aggregates ‎in China, Japan ‎and the U.S. on Euro area economic and financial variables over 1999-2012. Increases in ‎monetary aggregates ‎in China are associated with significant increases in the world price of ‎commodities and with increases in Euro area inflation, industrial production and exports. ‎Results are consistent with shocks to China’s M2 facilitating domestic growth with ‎expansionary consequences for the Euro area economy. In contrast, increases in monetary ‎aggregates in Japan are associated with significant appreciation of the Euro and decreases in ‎Euro area industrial production and exports. Production of goods highly competitive with ‎European goods in Japan and expenditure switching in Japan are consistent with the results. ‎U.S. monetary expansion has relatively small effects on the Euro area over this period ‎compared to results reported in the literature for earlier sample periods.‎

Keywords: International monetary transmission; China’s monetary aggregates; Euro area Commodity prices (search for similar items in EconPapers)
JEL-codes: E52 E58 F31 F42 (search for similar items in EconPapers)
Date: 2013-09-10
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-opm
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Related works:
Working Paper: International monetary transmission to the Euro area: Evidence from the U.S., Japan and China (2013)
Working Paper: International monetary transmission to the Euro area: Evidence from the U.S., Japan and China (2013)
Working Paper: International Monetary Transmission to the Euro Area: Evidence from the US, Japan and China (2013)
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