MONETARY POLICY: EFFECTS OF THE DECREASE OF THE INTEREST RATES OF THE FEDERAL RESERVE IN DOLLARIZED ECONOMIES (USA, ECUADOR, EL SALVADOR AND PANAMA)

Abstract

This research estimates the effect of the expansive monetary policy on the Federal Reserve in the economic growth and inflation in the countries with dollarized economies. In the evaluation of the effects of the monetary policy, it is used the data of both the Mundial Bank, the Federal Reserve Bank of the United States of America, and the econometric strategy of panel data with fixed and individual effects. The results show that the application of the expansive monetary policy fulfills the aim of revitalizing the economic growth after the Major Recession, without significant effect on the inflation of those economies.