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High-frequency and heteroskedasticity identification in multicountry models: Revisiting spillovers of monetary shocks

Michael Pfarrhofer, Anna Stelzer

arXiv 6 Dec 2019 · Econometrics · publishedMacroeconomic Dynamics (2025)

arXiv:1912.03158 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We explore the international transmission of monetary policy and central bank information shocks originating from the United States and the euro area. Employing a panel vector autoregression, we use macroeconomic and financial variables across several major economies to address both static and dynamic spillovers. To identify structural shocks, we introduce a novel approach that combines external instruments with heteroskedasticity-based identification and sign restrictions. Our results suggest significant spillovers from European Central Bank and Federal Reserve policies to each other's economies, global aggregates, and other countries. These effects are more pronounced for central bank information shocks than for pure monetary policy shocks, and the dominance of the US in the global economy is reflected in our findings.

Citation extraction

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Jarociński M (2022) Central bank information effects and transatlantic spillovers1.00063100%
2Jarociński M, and Karadi P (2020) Deconstructing monetary policy surprises – the role of information shocks0.86314564%
3Chan J, Eisenstat E, and Yu X (2022) Large Bayesian VARs with factor stochastic volatility: Identification, order invariance and structural analysis0.81142100%
4Korobilis D (2022) A new algorithm for structural restrictions in Bayesian vector autoregressions0.81142100%
5Ca'Zorzi M, Dedola L, Georgiadis G, Jarocinski M, Stracca L, and Str… (2023) Making waves: Monetary policy and its asymmetric transmission in a globalized world0.73732100%
6Baumeister C, and Hamilton JD (2015) Sign restrictions, structural vector autoregressions, and useful prior information0.64422100%
7Caldara D, and Herbst E (2019) Monetary policy, real activity, and credit spreads: Evidence from Bayesian proxy SVARs0.64422100%
8Huber F, Krisztin T, and Pfarrhofer M (2023) A Bayesian panel vector autoregression to analyze the impact of climate shocks on high-income economies0.64422100%
9Miranda-Agrippino S, and Nenova T (2022) A tale of two global monetary policies0.64422100%
10Cesa-Bianchi A, and Sokol A (2022) Financial shocks, credit spreads, and the international credit channel0.51121100%

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Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Large structural VARs with multiple linear shock and impact inequality restrictions0.40511