, are harder to quantify than those from conventional monetary policy. as there is not a single monitored policy variable, studies have to rely on indirect measures of unconventional monetary policy surprises. typically, a quantity that monetary policy appears to target, such as corporate bond spreads or term premia, has been used to do so. one difficulty in interpreting the results of this strand of the literature stems from the possibility that interest rate spreads may reflect information that goes beyond what is captured by us monetary policy. as a second caveat, i would like to add that almost all unconventional monetary policy measures that were taken so far were expansionary. as available studies are necessarily based on past data, they might not be informative regarding the effects policy actions have in the opposite direction. spillovers from euro area monetary policy turning to the euro area, the evidence suggests that spillovers from euro area monetary policy are smaller than those from the us, not least because of the dominance of the us dollar in global financial markets. 12 us inflation is shielded from exchange rate fluctuations in response to a euro area monetary policy loosening due to its “ privileged insularity ”, as almost all of us imports are invoiced in dollar. by the same token, euro area exports to the us would not benefit much from a depreciation of the euro vis - a - vis the dollar. at the same time, considering that a very large share of us exports to the euro area are invoiced in us dollar, there is a larger potential for real spillovers from euro area monetary policy to the us through expenditure switching away from us goods in the euro area. in this context, however, i would like to stress that if our monetary policy succeeds in stimulating euro area aggregate demand, then this will also increase euro area demand for us goods, counteracting the loss in competitiveness for us firms from the dollar appreciation. and as argued above, the income expenditure channel – in this case an expenditure increase – appear to be quantitatively more important than the expenditure switching channel. as regards the spillovers from the euro area to emerging economies, given that about 70 % of extra - euro area exports to these countries are invoiced in euro, there is a potential for a large impact through expenditure switching abroad. and due to the sheer size of the trade flows, such expenditure switching could have noticeable spillovers in neighbouring economies in for example, kim ( 2001 ) estimates that between one - fourth and one - half of

that the global economy has witnessed over recent years. first, several emerging economies – china in particular – have integrated in the global economy to an unprecedented degree. second, the increasing international fragmentation of production has given rise to tight links between countries along the global value chain. third, the liberalisation of capital flows and the rise of global banks have brought about strong cross - border financial linkages. fourth, the zero lower bound has rendered central bank balance sheets and forward guidance crucial monetary policy instruments. there is compelling “ prima - facie ” evidence that monetary policy in major advanced economies has significant spillovers to the global economy, at least in the short term. i refer here to the high sensitivity of global bond yields and exchange rates to recent monetary policy announcements in the us and the euro area. likewise, the changes in market expectations bis central bankers ’ speeches about the timing of us monetary policy tightening have given rise to bouts of financial market volatility. 1 however, over the medium term, considering the multiplicity of channels of monetary policy transmission, the impact on other countries ’ macroeconomic outlook is much less clearcut. it also critically depends on the economic fundamentals of the receiving countries, as i will explain in more detail later. the truth of the matter is that given the lack of historical precedents on what the impact of a major economy departing from a zero lower bound environment is, market analysts and policy makers do not have much of a choice other than “ learning in real time ”. while recent work in academia and policy institutions has improved our understanding of the transmission mechanisms that give rise to global spillovers, we still live with more open questions than answers. in the remainder of my remarks, i would like to discuss the spillovers generated by monetary policy in the us and in the euro area in more detail. i shall also briefly touch upon the implications of a growth slowdown in emerging economies. i will then share my views on how policymakers can deal with these spillovers. finally, i will briefly touch upon policies that may help increase the resilience of the international monetary system. monetary policy spillovers international spillovers from the monetary policy of one country to other economies are a corollary of globalisation. this entails that we, as policymakers, have to rise to the challenge of conducting monetary policy in the presence of these unintended side - effects. the sign and magnitude of monetary policy spillovers is, a priori, less clear than assumed in some economic