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Ms. Carolina Osorio Buitron and Mr. Esteban Vesperoni
Given the prospects of asynchronous monetary conditions in the United States and the euro area, this paper analyzes spillovers among these two economies, as well as the implications of asynchronicity for spillovers to other advanced economies and emerging markets. Through a structural vector autoregression analysis, country-specific shocks to economic activity and monetary conditions since the early 1990s are identified, and are used to draw implications about spillovers. The empirical findings suggest that real and monetary conditions in the United States and the euro area have oftentimes been asynchronous. The results also point to significant spillovers among them, in particular since early 2014—with spillovers from the euro area to the United States being particularly large. Against the backdrop of asynchronous conditions in these two economies, spillovers from real and money shocks to emerging markets and non-systemic advanced economies could be dampened.
International Monetary Fund

-for-one response. The recent re-escalation of financial and sovereign stress in the Euro area has thus renewed concerns about potential spillovers to emerging Europe, including Poland. 2. This paper takes stock of the economic and financial ties between Poland and the Euro area and analyzes the associated spillovers . We are particularly interested in measuring the potential impacts of a Euro area shock (real or financial) on Poland’s economy. We also investigate the possible channels through which shocks are transmitted across borders. 3. Business cycles in Poland and the

Ms. Carolina Osorio Buitron and Mr. Esteban Vesperoni

.elibrary.imf.org Contents Overview Background and Main Findings Data and Methodology Spillovers within Systemic Advanced Economies Spillovers to Emerging and Nonsystemic Advanced Economies Appendix 1: Spillovers and Synchronicity in the United States and the Euro Area: Developments During Selected Monetary Policy Cycles References Figures 1. United States and Euro Area 10-Year Yield Decomposition 2. Effects of U.S. and Euro Area Shocks on the U.S. Dollar–Euro Exchange Rate 3. Spillovers to Nonsystemic Advanced Economies from Shocks in the United States and

Carolina Osorio Buitron and Mr. Esteban Vesperoni

depreciation of the euro-U.S. dollar exchange rate, which is in line with developments in FX markets since early 2014 (see chart on the right). Figure 2. Effects of United States and euro area Shocks on the U.S. Dollar–Euro Exchange Rate (cumulative response to a shock that raises the 10-year yield in the source county by 100 bps) Source: IMF staff estimates. Note: U.S.=United States; EA=Euro area. Dollar - Euro Exchange Rate (U.S. dollars per Euro) Source: Haver Analytics. 4. Spillovers to Emerging and Nonsystemic Advanced Economies

Ms. Carolina Osorio Buitron and Mr. Esteban Vesperoni
This report analyzes the possible spillover effects that could result if the U.S. normalizes its monetary policy while euro area countries are increasing monetary stimulus (a situation referred to as asynchronous monetary conditions). This analysis identifies country-specific shocks to economic activity and monetary conditions since the early 1990s, finding that real and monetary conditions in the United States and the euro area have oftentimes been asynchronous and have often resulted in significant spillover effects, particularly since early 2014.