<p>I've read in a Reuters <a href="https://www.reuters.com/article/us-usa-economy-kemp-column/trump-must-choose-between-economy-and-trade-war-kemp-idUSKCN1VD1SJ" rel="nofollow noreferrer">article</a> that</p>

<blockquote>
  <p>The U.S. economy tends to be more responsive to monetary stimulus than the euro zone, Japan, China and other major trading partners.</p>
</blockquote>

<p>Is this unambiguously true regardless of time frame? (There isn't any data or reference provided to back up the statement.) If so, why is that the case?</p>

<p>(As an aside, the M2:GDP ratio, sometimes <a href="http://siteresources.worldbank.org/INTTOPACCFINSER/Resources/Banking.pdf" rel="nofollow noreferrer">taken</a> as a measure of the "depth" of the banking sector in the economy, seem <a href="https://data.worldbank.org/indicator/FM.LBL.BMNY.GD.ZS?locations=CN-US-JP" rel="nofollow noreferrer">greater</a> in China &amp; Japan than in the US. I couldn't find unambiguous data for Europe/EU/eurozone on that page.)</p>

CC BY-SA 4.0
2020-01-28T08:08:01.783Z
This is quite wired statement - especially given trouble that US Fed had recently due to zero lower bound, although it must be said that their monetary policy was more potent than the ECB’s but I would attribute that to Feds superior leadership at the time, Bernanke - is a scholar of Great Depression and acted very decisively, and the fact that ECB has additional constraint. Japan is in long term liquidity trap so I can believe US monetary policy is more potent than theirs but China and others? That does not seem right. The article also keeps talking about exchange rate maybe they mean...
1muflon1
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2020-01-28T08:11:55.347Z
... that thanks to USD being reserve currency US can more easily monetize its debt without having significantly lower exchange rate and call this stimulus?
1muflon1
CC BY-SA 4.0
2020-01-28T08:41:27.503Z
@1muflon1: Draghi has [blamed](https://www.theguardian.com/business/live/2019/sep/12/trump-delays-tariffs-markets-ecb-stimulus-package-qe-mario-draghi-business-live?page=with:block-5d7a42358f082514879f2cc0#block-5d7a42358f082514879f2cc0) the lack of concerted fiscal stimulus, btw.
fantastic peace and prosperity
CC BY-SA 4.0
2020-01-28T08:47:08.593Z
I know he was complaining about that but I think that the most damage to ECB monetary policy was done when he prematurely raised interest rate in early teens, that made ECBs commitments to increasing inflation less credible. Also the whole ECB response was very hesitant and not properly thought out see for example this comparison of ECB to US and UK https://voxeu.org/article/ecb-s-performance-during-crisis
1muflon1
<macroeconomics><monetary-policy>
Why is the U.S. economy more responsive to monetary stimulus than the euro zone, Japan, China and other major trading partners?
fantastic peace and prosperity
# Why is the U.S. economy more responsive to monetary stimulus than the euro zone, Japan, China and other major trading partners?

(Asked by: username_0 on 2020-01-28)

I've read in a Reuters [article](https://www.reuters.com/article/us-usa-economy-kemp-column/trump-must-choose-between-economy-and-trade-war-kemp-idUSKCN1VD1SJ) that

> The U.S. economy tends to be more responsive to monetary stimulus than the euro zone, Japan, China and other major trading partners.

Is this unambiguously true regardless of time frame? (There isn't any data or reference provided to back up the statement.) If so, why is that the case?

(As an aside, the M2:GDP ratio, sometimes [taken](http://siteresources.worldbank.org/INTTOPACCFINSER/Resources/Banking.pdf) as a measure of the "depth" of the banking sector in the economy, seem [greater](https://data.worldbank.org/indicator/FM.LBL.BMNY.GD.ZS?locations=CN-US-JP) in China & Japan than in the US. I couldn't find unambiguous data for Europe/EU/eurozone on that page.)

**Tags:** macroeconomics, monetary-policy
> **Comments:**
> **username_1**: This is quite wired statement - especially given trouble that US Fed had recently due to zero lower bound, although it must be said that their monetary policy was more potent than the ECB’s but I would attribute that to Feds superior leadership at the time, Bernanke - is a scholar of Great Depression and acted very decisively, and the fact that ECB has additional constraint. Japan is in long term liquidity trap so I can believe US monetary policy is more potent than theirs but China and others? That does not seem right. The article also keeps talking about exchange rate maybe they mean...  
> **username_1**: ... that thanks to USD being reserve currency US can more easily monetize its debt without having significantly lower exchange rate and call this stimulus?  
> **username_0**: @1muflon1: Draghi has [blamed](https://www.theguardian.com/business/live/2019/sep/12/trump-delays-tariffs-markets-ecb-stimulus-package-qe-mario-draghi-business-live?page=with:block-5d7a42358f082514879f2cc0#block-5d7a42358f082514879f2cc0) the lack of concerted fiscal stimulus, btw.  
> **username_1**: I know he was complaining about that but I think that the most damage to ECB monetary policy was done when he prematurely raised interest rate in early teens, that made ECBs commitments to increasing inflation less credible. Also the whole ECB response was very hesitant and not properly thought out see for example this comparison of ECB to US and UK https://voxeu.org/article/ecb-s-performance-during-crisis  

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## 0 answers

