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International Finance Discussion Papers
The International Finance Discussion Papers logo links to the International Finance Discussion Papers home page U.S. Unconventional Monetary Policy and Transmission to Emerging Market Economies
David Bowman, Juan M. Londono, and Haracio Sapriza
2014-1109  (June 2014)

Abstract: We investigate the effects of U.S. unconventional monetary policies on sovereign yields, foreign exchange rates, and stock prices in emerging market economies (EMEs), and we analyze how these effects depend on country-specifc characteristics. We find that, although EME asset prices, mainly those of sovereign bonds, responded strongly to unconventional monetary policy announcements, these responses were not outsized with respect to a model that takes into account each country's time-varying vulnerability to U.S. interest rates affected by monetary policy shocks.

Full paper (1216 KB PDF)

Keywords
Unconventional monetary policy, emerging markets, large-scale asset purchase program, quantitative easing, Federal Reserve

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