The international transmission of monetary shocks in a dollarized economy: The case of USA and Lebanon
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- handle: 10670/1.3hc4ae
- halshs: halshs-00174466
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interest rate International transmission law of one price monetary shock purchasing power paritySujets proches
Interest and usuryCiter ce document
Jean-François Goux et al., « The international transmission of monetary shocks in a dollarized economy: The case of USA and Lebanon », HAL-SHS : économie et finance, ID : 10670/1.3hc4ae
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We show that an American monetary shock wields an influence, though limited, over the Lebanese output in accordance with the literature advances. However, as we are waiting for a stronger transmission of U.S. short-term rates to Lebanese short-term rates, we notice that this transmission is weak in the first year. The result can be explained by the presence of pricing-to-market. After the end of the first year, we find the traditional result where the increase in the American interest rate is transmitted integrally to the Lebanese interest rate. We recognize this phenomenon as the dollarization effect.