Spillover Effect of Unconventional Monetary Policy and International Monetary Policy Coordination

Abstract

Since the global financial crisis of 2008, most of the developed economies tried to pursue Unconventional Monetary Policies (UMPs) which created adverse spillover effect to the emerging economies through capital flight, interest rate differential and exchange rate volatility. Lots of Emerging Market leader already raises their voice against those Unconventional policies. According to those issues, Central Bank leader around the globe show the eagerness to coordinate their monetary policies. Though recent monetary policy tightness from FED, negative rate scenario from some developed economies and zero rate policies from ECB doesn’t made the coordination attempt successful yet but no one ignore the importance of successful monetary policy coordination. This paper tried to discuss the spillover effect of unconventional monetary policies along with success and failure attempt of monetary policy coordination.