Effects of the U.S. Quantitative Easing on Latin American Economies

Produced by: 
Peruvian Economic Association (PEA)
Available from: 
April 2015
Paper author(s): 
César Carrera (Central Reserve Bank of Peru)
Fernando Pérez Forero (Central Reserve Bank of Peru)
Nelson Ramírez-Rondán (Central Reserve Bank of Peru)
Macroeconomics - Economic growth - Monetary Policy
Politics and Economy

Emerging economies have been largely affected for Fed's Quantitative Easing (QE) policies. This paper assesses the impact of these measures in terms of key macroeconomic variables for four small open economies (SOE) in Latin America such as Chile, Colombia, Mexico and Peru. We identify a QE policy shock in a Structural VAR with Block Exogeneity (à la Zha, 1999) and we impose a mixture of zero and sign restrictions (à la Arias et al., 2014). Overall, we find that this QE policy shock has significant effects on financial variables such as aggregate credit and the exchange rate. These effects are larger than the ones produced on output and prices.


Research section: 
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