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Towards a New Normal: How Different Paths of US Monetary Policy Affect the World Economy
Author(s) -
Feldkircher M.,
Huber F.,
Moder I.
Publication year - 2015
Publication title -
economic notes
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.274
H-Index - 19
eISSN - 1468-0300
pISSN - 0391-5026
DOI - 10.1111/ecno.12041
Subject(s) - monetary policy , economics , normalization (sociology) , monetary economics , emerging markets , affect (linguistics) , carry (investment) , international economics , macroeconomics , linguistics , philosophy , sociology , anthropology
This note examines the impact of US monetary policy tightening on global output and consumer prices. We assess different paths of monetary policy normalization based on expectations of members and participants of the Federal Open Market Committee (FOMC), the US Federal Reserve's policy‐making body. In the medium term, we find considerable negative effects on world GDP but only moderate effects on international prices. These negative spillovers are not confined to emerging economies but tend to carry over to other industrialized economies as well.