Shocks without borders: U.S. monetary policy and the Canadian economy
Date
2025
Authors
Scarcella, Aidan Michael
Journal Title
Journal ISSN
Volume Title
Publisher
University Of Victoria
Abstract
Canada and the United States share one of the closest economic partnerships in the world. Given the magnitude of the United States economy, the monetary policy decisions of the United States are bound to affect the Canadian economy. This paper investigates the spillover effects of US monetary policy shocks on Canadian macroeconomic outcomes. I use a structural vector autoregression model with an instrumental variable approach (SVAR-IV) for the identification of monetary policy shocks. I estimate the long-term response of the Canadian economy to a US monetary policy shock through the exchange rate, trade, and financial channel variables.
Description
Keywords
monetary economics, monetary shocks, pillovers, macroeconomics