ECB paper finds asymmetric spillover from US monetary policy
Tightening episodes affect emerging markets more than expansionary episodes do, say researchers
Contractionary monetary policy in the US has a larger spillover to emerging markets than expansionary policy does, a working paper from the European Central Bank finds.
The paper, published on October 29, compares the global transmission of US monetary policy during tightening periods to that during easing periods. It finds a significant asymmetry as the former dampen output more than the latter improve output.
The authors – Jakub Mistak and Gulcin Ozkan – argue that movements in the banking
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