Browsing by Author "Lopes, Alexandre Almeida"
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- The Spillover effects between USA and Euro AreaPublication . Lopes, Alexandre Almeida; Fuinhas, José Alberto Serra Ferreira RodriguesThis paper addresses to the spillover effects from the USA to the Euro Area and the spillover from Euro Area to the USA, under oil prices. Taking into consideration the already accepted and well-established literature is well known the effects of the USA monetary policy on other economies, being in some cases bigger and stronger than in the USA economy itself. Following this line of thought, this paper aims, supported by a VECM methodology and using quarterly data from 2000Q1 to 2015Q4, to measure the magnitude of spillover effects on both economies. The results also contribute to shed light on economic policy procedures, specially enabling the decision makers to handle this effects in their economies. The results are consistent with the literature. The USA monetary policy plays the major role on the propagation of monetary shocks across the globe, especially to the big and mature economies, such as the Euro Area and to economies linked to the USA dollar. However, the Euro Area is also a source of shocks to the USA economy but, as expected, in a smaller scale. It is also shown how important the money supply and the interest rates are to restrain the inflationary pressures originated by the oil prices, producing a sizable spillover on the other economy. Ultimately these results are easily understood, being both economies integrated in a global market dominated by the USA and consequently, is not strange, that the USA is the biggest source of these shocks.