U.S. Monetary Policy Spillover on Brics Countries
This study examine the spill over effect of U.S. monetary policy on BRICS economies during the current decade start form May 2004 to February 2016. The study use the VAR model for data analysis and use the Federal Reserve balance sheet as the proxy for the U.S. monetary actions, the results show that, overall U.S. monetary policy has influence on BRICS’ outputs, policy rate, real effective exchange rate, trade balance and treasury yield but has no influence on inflation. Overall, the extent to which BRICS macro-variable response to U.S. monetary policy are very across countries. In addition, Trade and Interest rate are transmission channels of U.S. monetary policy spill over to BRICS countries.
Keywords- Spillover, Monetary Policy, Macro-economic