Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/298172 
Year of Publication: 
2024
Series/Report no.: 
ADB Economics Working Paper Series No. 726
Publisher: 
Asian Development Bank (ADB), Manila
Abstract: 
This paper empirically examines the impact of global shocks on monetary policy transmission in 24 emerging market economies (EMEs), using panel local projections over the period 2000 to 2022. The estimated results show that adverse global shocks, namely a tighter United States monetary policy stance, higher global financial market uncertainty, and global climate change, could dampen the transmission of monetary policy in EMEs. Specifically, the overall responses of industrial production and inflation to monetary policy shocks are more muted compared to the case where the impacts of global factors are isolated. We also study whether economy-specific characteristics across EMEs affect the monetary policy transmission impacts of global shocks. The results suggest that a higher level of financial development can partially offset the dampening effects of global shocks, while a higher degree of capital account openness and trade openness further amplify the impact of global shocks.
Subjects: 
global shocks
monetary policy transmission
emerging market economies
JEL: 
E52
F4
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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