Recent Articles

Read more about our latest published articles.

Review’s Archive

Corresponding Author:
Deergha Raj Adhikari, Department of Economics and Finance, University of Louisiana at Lafayette, LA, USA

Effect of Recent U.S. Monetary Policy on the Balance of Trade.

Volume 69 - Issue 1, February 2016
(pp. 1-10)
JEL classification: C13, E32, E58, F41
Keywords: Business Fluctuations and Cycles, Central Banks and their Policies, Causality, Open Economy Macroeconomics


Our study develops a model of the balance of trade, which is a function of domestic (U.S.) and foreign real GDPs, exchange rate of U.S. dollar, and monetary policy (credit easing) dummy. We then empirically test the model on a panel data for the U.S. and BRICS countries over the period, 1995-2014, and find that the Fed’s quantitative easing has no effect, whatsoever, on U.S. balance of trade.

Read the full article

Download the article in PDF format to read and print.


Bouakez, H. and M. Normandin (2010), “Fluctuations in the Foreign Exchange Market: How Important are Monetary Policy Shocks?” Journal of International Economics, 81(1), 139-153.

Clarida, R. and J. Gali (1994), “Sources of Real Exchange Rate Fluctuations: How Important are Nominal Shocks?” Carnegie Rochester Conference Series on Public Policy, 41(1), 1-56.

Clouse, J., D. Henderson, A. Orphanides, D. Small and P. Tinsley (2000), “Monetary Policy when the Nominal Short-term Interest Rate is Zero”, Topics in Macroeconomics, 3(1), 1-76.

Eggertson, G. and M. Woodford (2003), “The Zero Bound on Interest Rates and Optimal Monetary Policy”, Brookings Papers on Economic Activity, 34(1), 139-233.

Eichenbaum, M. and C. Evans (1995), “Some Empirical Evidence on the Effects of Monetary Policy Shocks on Exchange Rates”, NBER Working Paper no. 4271.

Faust, J. and J. Rogers (2003), “Monetary Policy’s Role in Exchange Rate Behavior”, Journal of Monetary Economics, 50(7), 1403-1424.

Federal Reserve Bank of Cleveland (2015), “Credit Easing”, (

Gagnon, J., M. Raskin, J. Remache and B. Sack (2011), “The Financial Market Effects of the Federal Reserve’s Large-Scale Asset Purchases”, International Journal of Central Banking, 7(1), 3-43.

Glick, R. and S. Leduc (2012), “Central Bank Announcements of Asset Purchases and the Impact on Global Financial and Commodity Markets”, Journal of International Money and Finance, 31(8), 2078-2101.

Glick, R. and S. Leduc (2013), “Effects of Unconventional and Conventional U.S. Monetary Policy on the Dollar”, Federal Reserve Bank of San Francisco.

Hamilton, J. and J. Wu (2015), “Effects of Index-Fund Investing on Commodity Futures Prices”, International Economic Review, 56(1), 187-205.

Hudson, M. (2010), “U.S. Quantitative Easing is Fracturing the Global Economy”, Levy Economic Institute of Bard College, Economic Working Paper Archive No. 639.

Krishnamurthy, A. and A. Vissing-Jorgensen (2011), “The Effects of Credit Easing on Interest Rates: Channels and Implications for Policy”, Working Paper, Northwestern University, Kellogg School of Business.

Kurihara, Y. (2006), “The Relationship between Exchange Rate and Stock Prices during the Quantitative Easing Policy in Japan”, International Journal of Business, 11(4), 375-386.

Li, C. and M. Wei (2012), “Term Structure Modeling with Supply Factors and the Federal Reserve’s Large Scale Asset Purchase Programs”, Finance and Economics Discussion Series 2012-2037.

Neely, C. (2010), “The Large-Scale Asset Purchases had Large International Effects”, Federal Reserve Bank of St. Louis, Working Paper No. 2010-018C.

Scholl, A. and H. Uhlig (2008), “New Evidence on the Puzzles: Results from Agnostic Identification on Monetary Policy and Exchange Rates”, Journal of International Economics, 76(1), 1-13.

Ugai, H. (2006), “Effects of the Credit Easing Policy: A Survey of Empirical Analyses”, Bank of Japan Working Paper Series 06-E-10.


Register your account

First-time users should click on “Register your account” and enter the requested information. Upon successful registration, you will receive an e-mail with instructions to verify your registration.

Submission Guidelines

Authors’ login

Use the assigned user ID and password to login. Please, do not register again. Usernames and passwords may be changed after.

Quick search by author:
Back to the top

Institute for International Economics
of the Genoa Chamber of Commerce

Istituto di Economia Internazionale
Camera di Commercio di Genova
Via Garibaldi, 4 (III piano) - 16124 Genova (Italy)