Due to the severity of the 2007-2009 financial crisis, the Federal Reserves of the United States aggressively lowered policy rate to zero and adopted several unconventional monetary policies, including Quantitative Easing. It has long suggested that US monetary policies had strong spillover effects on foreign countries. And indeed the governor of Taiwan’s central bank expressed strong concerns of such ripple effects of US policy on the Taiwanese economy. We follow previous research to use Fed unconventional monetary policy announcements to check if US monetary policy has significant impacts on the Taiwanese economy and financial markets. We also compare these spillover effects of traditional monetary policies before the crisis with the unconventional policies implemented during and after the crisis. The results show that indeed US monetary policies exert significant impacts on the Taiwanese economy. We also discuss the Taiwan’s central banks responses to these spillover effects.
The 1st International Conference on Econometrics and Statistics (HKUST), Hong Kong University of Science and Technology (HKUST) Business School EcoSta 2017, Parallel Session O, Saturday 17.06.2017 16:10 - 17:50, EO188 Room LSK1001 APPLICATIONS AND EMPIRICAL RESEARCH IN ECONOMICS AND FINANCE, EO0496