Date of Award


Degree Name

Doctor of Philosophy



First Advisor

Dr. Mark Wheeler

Second Advisor

Dr. Susan Pozo

Third Advisor

Dr. Catalina Amuedo-Dorantes


This dissertation investigates two aspects of foreign shocks that affect emerging countries: U.S. monetary shocks and workers' remittances. My attention inparticular centers on the macroeconomic impact of these foreign shocks. More specifically, in the first essay (Chapter 2) I analyze the international transmission of U.S. monetary policy to emerging economies distinguishing between a direct transmission process and an augmented international transmission. In the augmented transmission mechanism, U.S. shocks may impact leading countries in different regions, and those countries' reactions then affect smaller countries. In the second essay (Chapter 3) I investigate the effects of monetary policy on stock market returns of emerging countries, distinguishing between the impact of domestic monetary policy and the impact of U.S. monetary actions, the latter is designed to capture the international transmission to stock markets. Finally, in the last essay (Chapter 4), I evaluate the impact of workers' remittances on money in developing countries under a framework where the monetary approach to the balance of payments and currency substitution are used.

The empirical analysis in Chapters 2 and 3 is conducted using a sample of countries from Asia and Latin America. Results are extracted from impulse responses derived from vector error correction (VEC) models. The estimation in Chapter 4 relies on panel data and three-stage least squares regressions for a sample of Latin American countries with strong remittance presence.

The results presented in this dissertation indicate that emerging economies are impacted by U.S. monetary actions and by workers' remittances. Emergingeconomies seem to benefit from contractionary monetary policy actions originated in the United States because output in emerging economies shows a positive response. In addition, some evidence of the significance of U.S. monetary actions on stock markets in emerging economies is found. In thesecountries, stock markets receive a significant influence from domestic and foreign monetary policy actions. In particular, increases in interest rates, which correspond to contractionary monetary policy, reduce stock market returns. With respect to workers' remittances, they exert a negative impact on the money demand in developing economies, which suggests that remittances can be a factor that may accelerate the currency substitution process in these countries.

Access Setting

Dissertation-Open Access

Included in

Economics Commons