Journal of International Economics· 2026Q1
The global transmission of U.S. monetary policy
- 73citations
- Q1SCImago
- 2026year
Short summary
US monetary policy tightenings transmit globally via commodity and oil prices, causing deflationary effects on headline inflation across 30 economies.
AI-generated from the title and abstract; the full text is not read.
Key points
- US monetary policy tightenings lead to global recessionary effects.
- Commodity and oil prices are key in transmitting US monetary policy globally.
- This 'commodity price channel' predominantly causes deflationary effects on global headline inflation.
- The findings are based on data from 30 economies using advanced empirical counterfactuals.
AI-generated from the title and abstract; the full text is not read.
Abstract
Fed’s decisions affect global economic conditions, with tightenings leading to widespread recessionary effects. Using a state-of-the-art identification strategy, a dataset covering 30 economies, and techniques for constructing empirical counterfactuals, we show that commodity and oil prices play a critical role in propagating US monetary policy to global headline inflation, generating predominantly deflationary effects. We refer to this novel mechanism as the ‘commodity price channel’ of US monetary policy.
The authors' abstract, as published at the source. Journal of International Economics, 2026 · DOI ↗
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Field: General Economics, Econometrics and Finance
General Economics, Econometrics and FinanceEconomics, Econometrics and Finance