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Regional Asymmetries in the Impact of Monetary Policy Shocks on Prices: Evidence from US Cities

Author

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  • David Fielding

    (Department of Economics, University of Otago)

  • Kalvinder Shields

    (Department of Economics, University of Melbourne)

Abstract

Deviations from the Law of One Price across US cities are smaller than corresponding international deviations, but nevertheless substantial. We find that a proportion of these deviations can be explained by asymmetric responses to federal monetary policy shocks, and that a large part of the asymmetry can be explained by city-specific economic characteristics.

Suggested Citation

  • David Fielding & Kalvinder Shields, 2007. "Regional Asymmetries in the Impact of Monetary Policy Shocks on Prices: Evidence from US Cities," Working Papers 0702, University of Otago, Department of Economics, revised Feb 2007.
    • Handle: RePEc:otg:wpaper:0702
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    References listed on IDEAS

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    Cited by:

    1. Pei-Fen Chen & Jhih-Hong Zeng & Chien-Chiang Lee, 2015. "Monetary Policy and the Diversification–Profitability Linkage in Banking: Evidences from Emerging Market Economies," South African Journal of Economics, Economic Society of South Africa, vol. 83(4), pages 576-597, December.
    2. Matteo Barigozzi & Antonio M. Conti & Matteo Luciani, 2014. "Do Euro Area Countries Respond Asymmetrically to the Common Monetary Policy?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(5), pages 693-714, October.
    3. Maria Christidou & Panagiotis Konstantinou, 2011. "Housing Market and the Transmission of Monetary Policy: Evidence from U.S. States," Discussion Paper Series 2011_14, Department of Economics, University of Macedonia, revised Sep 2011.
    4. Naseem Faraz & Zainab Iftikhar, 2017. "The Regional Asymmetric Responses To Central Bank’S Monetary Policy In Pakistan," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(02), pages 351-364, March.
    5. Alagidede, Paul & Coleman, Simeon & Cuestas, Juan Carlos, 2012. "Inflationary shocks and common economic trends: Implications for West African monetary union membership," Journal of Policy Modeling, Elsevier, vol. 34(3), pages 460-475.
    6. Nkwoma, Inekwe John, 2017. "Futures-Based Measures Of Monetary Policy And Jump Risk," Macroeconomic Dynamics, Cambridge University Press, vol. 21(2), pages 384-405, March.
    7. Roy, Ripon & Bashar, Omar H.N.M. & Bhattacharya, Prasad Sankar, 2023. "The cross-industry effects of monetary policy: New evidence from Bangladesh," Economic Modelling, Elsevier, vol. 127(C).
    8. Coleman, Simeon, 2012. "Where Does the Axe Fall? Inflation Dynamics and Poverty Rates: Regional and Sectoral Evidence for Ghana," World Development, Elsevier, vol. 40(12), pages 2454-2467.

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    More about this item

    Keywords

    Law of One Price; monetary policy shocks;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • R19 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Other

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