Comparing Monetary And Fiscal Policy Transmission Across The Americas And The Emu-Area

Abstract

This paper estimates structural VAR models to compare the transmission mechanism of monetary and fiscal policy in the Americas and the EMU–area countries.  First, the NAFTA countries are considered and the estimation results are compared with those for the EMU-area countries. Attention is also paid to interaction of macroeconomic policies and the effects of shocks in financial markets.  Results show that the Americas except for the U.S. and Canada react rather differently to monetary and fiscal policy shocks than the EMU- area countries.