The Impact of Monetary Policy Tightening by the US Federal Reserve and the ECB on the Macroeconomic Dynamics of Developing Countries in 2022-2023

Student: Ekaterina Zelentsova

Faculty: Faculty of World Economy and International Affairs

Educational Programme: World Economy (Master)

Year of Graduation: 2024

Actions by the US Federal Reserve and the ECB to tighten monetary policy have a significant impact on a variety of factors, including GDP, inflation, trade balances, exchange rates and the overall economic stability of developing countries. These changes could lead to higher interest rates and higher borrowing costs for developing countries, which in turn could slow economic growth and development. The thesis examines the impact of monetary policy tightening by the US Federal Reserve and the ECB on developing countries in 2022-2023. Brazil, Mexico, South Africa, Indonesia and Thailand were taken as developing countries. In order to identify the impact, a VAR model was used by constructing impulse response functions and variance decomposition.

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