An Analysis of the International Spillover Effects of the Bank of England’s Quantitative Easing Program

Abstract

The past few years has brought us conclusive evidence that the Quantitative Easing (QE) programs of emerging market economies in the wake of the global financial crisis have had significant effects within their own economies. Recently work looking at the crossborder flows of the US Federal Reserve has become more prevalent due to the volatility of certain emerging market economies in the summer of 2013. In this paper I address the previously unexplored topic of the spillover effects of the Bank of England’s QE program. Using a combination of OLS regressions of various specifications I find that it had statistically significant and similar effects on asset prices and portfolio allocations in emerging market economies. Specifically, the program increased equity prices and allocations into equities within in the countries I analyzed, and put upward pressure on some currencies in the sample.