Author(s)

Jiayi Liu

Corresponding Author

Jiayi Liu

ABSTRACT

The review combines over ten papers about United States unconventional monetary policy (UMP) to find out the effects on US domestic financial markets and spillovers to other countries’ financial markets. For spillovers, US-to-Asia spillovers it the most and US UMP has negative effects on emerging markets’ (EMEs) stock and bonds market. The UMP has the most effects at beginning of quantitative easing (QE) and can help restore EMEs economy. Other authorities and investors would diversify their portfolio according to FED signal. For US financial markets, unconventional monetary policy has greater effects than conventional monetary policy (UMP) and can effectively reduce spreads of bonds. UMP can made FED monetary policy has greater effects and have huge positive impacts on stock markets. The portfolio rebalancing channel and signalling channel can influence stock-bond market relation. For policy implications and limitations, policymakers should notice UMP has greater effects and understand its transmission patterns. Future research can include broader time period and range.

KEYWORDS

United States unconventional monetary policy, spillover effects, financial markets