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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.
Carolina Osorio Buitron and Mr. Esteban Vesperoni

important global effects, given their relatively large size and strong trade and financial linkages with other economies. This note analyzes divergences in real and monetary conditions in the United States and the euro area, and the spillover implications for emerging markets and nonsystemic advanced economies (EMNS). 2 Building on the 2014 Spillover Report ( IMF 2014 ), a novelty of this note is the analysis of spillovers from asynchronicity between the United States and euro area—both in terms of growth and monetary conditions—as well as its impact on the bilateral

Patrick Blagrave and Mr. Esteban Vesperoni
Using a panel vector autoregression and a novel measure of export-intensity-adjusted final demand, this note studies spillovers from China’s economic transition on export growth in 46 advanced and emerging market economies. The analysis suggests that a 1 percentage point shock to China’s final demand growth reduces the average country’s export growth by 0.1–0.2 percentage point. The impact is largest in Emerging Asia, where an export-growth-accounting exercise suggests that China’s economic transition has reduced average export growth rates by 1 percentage point since early 2014. Other countries linked to China’s manufacturing sector, as well as commodity exporters, are also significantly affected. This suggests that trading partners need to adjust to an environment of weaker external demand as China completes its transition to a more sustainable growth model.
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.
Patrick Blagrave and Mr. Esteban Vesperoni

Using a panel vector autoregression and a novel measure of export-intensity-adjusted final demand, this note studies spillovers from China’s economic transition on export growth in 46 advanced and emerging market economies. The analysis suggests that a 1 percentage point shock to China’s final demand growth reduces the average country’s export growth by 0.1–0.2 percentage point. The impact is largest in Emerging Asia, where an export-growth-accounting exercise suggests that China’s economic transition has reduced average export growth rates by 1 percentage point since early 2014. Other countries linked to China’s manufacturing sector, as well as commodity exporters, are also significantly affected. This suggests that trading partners need to adjust to an environment of weaker external demand as China completes its transition to a more sustainable growth model.

Ms. Carolina Osorio Buitron and Mr. Esteban Vesperoni

Front Matter Page SPILLOVER NOTES Spillover Implications of Differences in Monetary Conditions in the United States and in the Euro Area Carolina Osorio Buitron and Esteban Vesperoni SPILLOVER TASK FORCE | INTERNATIONAL MONETARY FUND 1 JULY 2015 Front Matter Page Spillover Implications of Differences in Monetary Conditions in the United States and the Euro Area Carolina Osorio Buitron and Esteban Vesperoni Front Matter Page Copyright © 2015 International Monetary Fund Cataloging-in-Publication Data

International Monetary Fund

policy exit can be managed given the challenges involved. Lessons from the taper episode a year ago indicate that spillovers are different across partner countries and depend on interactions with local fundamentals and policy frameworks. As monetary accommodation is removed, the spillover implications from financial sector reform will also become more apparent. Second, many emerging market economies are growing more slowly, on a durable basis, from their high point. This carries important external effects through global trade and finance, and influences other emerging