Inflation and US monetary policy transmission at home and abroad
Sebnem Kalemli-Ozcan
University of Maryland
The lectures will review the literature on international spillovers from US policy and the strong dollar and then will look at the current global inflation episode from the lens of the current models, new models and data. The following channels of transmission will be discussed:
- Financial vs trade channel for international spillovers.
- Asset based vs. earnings based financial constraints in domestic and international context and the importance of these different type of financial constraints for shock transmission—how different models will imply different things and what is in micro and macro data.
- Endogenous response of monetary policy of other countries, especially emerging markets.
- The role of risk premia in transmission through international arbitrage deviations and implications for other policies/coordination as optimal policies.