• SanjitiKapoor
• Vineeth Mohandas

The study attempts to capture the influence of monetary policy of one central bank on another in the present globalised world. The study used monthly time series data of long-term interest rates of major countries US, India, Japan and Euro Area from December 2011 to November 2017. Based on VAR analysis, Impulse Response and Variance decomposition, found that the monetary policy of countries are majorly influenced by the policy changes made by Federal Reserve System, US. Reserve Bank of India responds almost immediately to a policy change in US, and quiet often it has a sustained impact. Japan and Euro Area also responds to the policy changes made by Fed, but has impact only in the short run. Japan and Euro Area have an increased economic integration and thereby their policies influence each other in a major way. Indian monetary policy was never found to have any impact over the policies of US. The study concluded that while considering the monetary policy reaction, the impact of the policy changes of major central banks should also be considered along with the changes in the macroeconomics variables as advocated by the Taylor rule

Monetary Policy Reaction, Taylor rule, VAR, Impulse Response Function, Variance Decomposition, Federal Reserve System, Reserve Bank of India, Euro Area, Japan

"EVIDENCES OF INTERDEPENDENCY IN THE POLICY RESPONSES OF MAJOR CENTRAL BANKS: AN ECONOMETRIC ANALYSIS USING VAR MODEL", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.5, Issue 6, page no.349-355, June-2018, Available :http://www.jetir.org/papers/JETIRC006062.pdf

"EVIDENCES OF INTERDEPENDENCY IN THE POLICY RESPONSES OF MAJOR CENTRAL BANKS: AN ECONOMETRIC ANALYSIS USING VAR MODEL", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.5, Issue 6, page no. pp349-355, June-2018, Available at : http://www.jetir.org/papers/JETIRC006062.pdf