Abstract
I study spillovers of US monetary policy to the rest of the world, as well as spillbacks to the US economy in an empirical multi-country model over time. Within the multilateral framework, I distinguish the bilateral effect from the network effects that arise from interactions among recipient countries. While the bilateral effect on average has remained constant, the network effects have strengthened over time, amplifying the resulting spillovers and spillbacks. This implies that it is not the bilateral integration with the US that determines the recently increased magnitude of the spillovers, but rather the global integration vis-`a-vis other countries. The recipient country’s floating exchange rate regime can reduce the size of the spillovers. However, with the increased network effects, a floating exchange rate regime only partially insulates these economies from a US monetary easing. Financially open countries also experience a more considerable impact on their output