The Importance of Global Shocks for National Policymakers: Rising Challenges for Central Banks



-19-

Apart from a common liquidity driving force, global demand and house price
shocks prove to be important as well. For example, a sudden change in the global GDP
disturbance leads to temporary higher inflation from quarter two to quarter eleven.
Significant responses of common factors can also be found after a global house price
shock. In contrast, the common short-term interest rate is not a driving but a driven force
in the global economy. For example, an interest rate shock does not trigger any
significant response of the common house price factor. Instead, a sudden change in the
disturbance of residential property prices leads to an increasing short-term interest rate.
The same insignificant results are found for the inflation factor and commodity and share
prices (see Table A1 for more results).

Chart 2 - Impulse response analysis in SFAVAR (various global shocks)



01

234567891011121314151617181920


01

234567891011121314151617181920




More intriguing information

1. Natural hazard mitigation in Southern California
2. The name is absent
3. Cross-Country Evidence on the Link between the Level of Infrastructure and Capital Inflows
4. The name is absent
5. Healthy state, worried workers: North Carolina in the world economy
6. The name is absent
7. Outline of a new approach to the nature of mind
8. Business Cycle Dynamics of a New Keynesian Overlapping Generations Model with Progressive Income Taxation
9. Les freins culturels à l'adoption des IFRS en Europe : une analyse du cas français
10. An Interview with Thomas J. Sargent