Francisca Torrealba, estudiante de Doctorado en Economía UC

Paper: “US Large-Scale Asset Purchases spillover across countries: The role of corporate bond maturity”

Abstract: This study uses a panel Bayesian VAR model to analyze whether the US unconventional momentary policy shocks, identified through Large-Scale Asset Purchases (LSAP), have an impact on corporate bond maturity, financial and macroeconomic conditions in emerging markets (EMEs), and small open advanced economies(SOAEs). Additionally, this paper studies whether corporate bond debt is an essential channel of shock transmission. The results indicate that US LSAPs significantly lengthen corporate bond maturities, especially in EMEs, explaining approximately 30% of its variation. Moreover, the EMEs respond to the shock by significantly easing financial, credit, and macroeconomic conditions. Corporate bond maturity emerges as a crucial channel for the transmission of unconventional monetary policy due to its ability to enhance debt-servicing capacity and reduce rollover risk, ultimately contributing to a more stable economy. Conversely, the impact of these effects is less pronounced and significant in SOAEs.