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Regional Asymmetries in the Impact of Monetary Policy Shocks on Prices: Evidence from US Cities


  • We are grateful to two anonymous referees and seminar participants at Canterbury University, Deakin University, the Centre for Central Banking Studies and the Reserve Bank of New Zealand for comments on earlier drafts of this paper. All remaining errors are our own.


Variations in real exchange rates across US cities are smaller than corresponding international variations, but nevertheless substantial. We find that a proportion of these variations can be explained by asymmetric responses to federal monetary policy shocks, and that a large part of the asymmetry can be explained by city-specific economic characteristics including the composition of local industry, bank size, house prices and the age distribution of the population.