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| James Dean |
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| ''Unconventional U.S. monetary policy and international financial market stability'' |
| ( 2026, Vol. 46 No.1 ) |
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| From December 2008 to December 2015, the Federal Reserve held interest rates at the zero lower bound. Unable to lower short term rates further, the Fed engaged in unconventional monetary policy, buying large quantities of US assets and Treasury bonds. This paper examines the international effect of these large scale asset purchases on foreign financial markets. Using a panel VAR estimation on OECD countries, I find shocks to the Fed's unconventional monetary policy increased global stock market volatility by one standard deviation with little influence on the yield curve. I find slightly larger results for Eurozone countries. Overall, these results indicate the Fed's unconventional monetary policies had a significant impact on financial markets throughout the developed world |
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| Keywords: Panel VAR, International Spillovers, Unconventional Monetary Policy |
JEL: E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General
F4 - Macroeconomic Aspects of International Trade and Finance: General |
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| Manuscript Received : Nov 17 2025 | | Manuscript Accepted : Mar 30 2026 |
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