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Monetary Policy in the Capitals of Capital

Listed author(s):
  • Elena Gerko
  • Hélène Rey

The importance of financial markets and international capital flows have increased greatly since the 1990s. How does this affect the effectiveness of monetary policy? We analyse the transmission of monetary policy in two important financial centres, the United States and the United Kingdom. Studying the responses of mortgage and corporate spreads we find evidence in favour of an important financial channel in both countries. Our identification strategy allows us to study movements in the policy rates and the effect of forward guidance, broadly defined. We also analyse international financial spillovers, which we find to be asymmetric.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 23651.

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Date of creation: Aug 2017
Publication status: published as Elena Gerko & Hélène Rey, 2017. "Monetary Policy in the Capitals of Capital," Journal of the European Economic Association, vol 15(4), pages 721-745.
Handle: RePEc:nbr:nberwo:23651
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  24. repec:dau:papers:123456789/14524 is not listed on IDEAS
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