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Working Papers

Global Footprints of Monetary Policies

Miranda-Agrippino, S., Nenova, T., Rey, H.

We study the international transmission of the monetary policy of the two world's giants: China and the US. From East to West, the channels of global transmission di ffer markedly. US monetary policy shocks a ect the global economy primarily through their eff ects on integrated financial markets, global asset prices, and capital flows. EMEs in particular see both a reduction in inflows and a surge in outflows when the market tide turns as a result of a US monetary contraction. Conversely, international trade, commodity prices and global value chains are the main channels through which Chinese monetary policy transmits worldwide. AEs with a strong manufacturing sector are particularly sensitive to these disturbances.

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