Arbeitspapier
International transmission of quantitative easing policies: Evidence from Canada
What are the cross-border spillovers from major economies' quantitative easing (QE) policies to their trading partners? We provide evidence by concentrating on spillovers from the US to Canada during the zero lower bound period when QE policies were actively used. We identify QE shocks in the US and estimate their impact on a large number of Canadian macroeconomic and financial variables. We then analyze transmission channels of foreign QE shocks to the domestic economy. Our results suggest that US QE shocks are expansionary for Canada despite a currency appreciation. This is because they spill over to domestic borrowing costs, lowering long-term rates as well as financial premiums, and increasing asset prices. We find evidence for both portfolio balance and risk channels.
- Language
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Englisch
- Bibliographic citation
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Series: Bank of Canada Staff Working Paper ; No. 2022-30
- Classification
-
Wirtschaft
Monetary Policy
Open Economy Macroeconomics
International Business Cycles
- Subject
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Business fluctuations and cycles
International topics
Monetary policy transmission
- Event
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Geistige Schöpfung
- (who)
-
Kabaca, Serdar
Tuzcuoglu, Kerem
- Event
-
Veröffentlichung
- (who)
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Bank of Canada
- (where)
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Ottawa
- (when)
-
2022
- DOI
-
doi:10.34989/swp-2022-30
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Kabaca, Serdar
- Tuzcuoglu, Kerem
- Bank of Canada
Time of origin
- 2022
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Optimal monetary and macroprudential policies
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High-frequency real economic activity indicator for Canada
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Markups in Canada: Have they changed and why?
What explains month-end funding pressure in Canada?
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Quantitative easing and long-term yields in small open economies