Managing global monetary spillovers
Inflation pressures have triggered a largely synchronised tightening of monetary policy around the world. The sharp appreciation of the US dollar is adding to the challenges that policymakers confront. The paper sets out to identify the channels through which US tightening spills over to the rest of the world, with a particular focus on the euro area. It also examines the risks that stem from uncoordinated monetary tightening and discusses how different forms of global cooperation can help mitigate those risks.
The paper was prepared within the framework service contract which is intended to support the work of ECON in the European Parliament by enabling it to seek independent expert advice in the field of monetary and economic affairs to support its scrutiny activity, in particular in the context of the Monetary Dialogues between ECON with the European Central Bank (ECB). Expertise is requested on a wide range of issues relevant to the work of ECON in relation to EU economic and monetary integration, including governance and institutional aspects, as appropriate.