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The nexus between trade conflict and monetary policy is of great importance in international political and economic analysis. By employing data from a panel of global countries covering the period 2000–2015, this paper empirically analyzes the impact of trade conflict on monetary policy and how it works. We document the evidence that trade conflict has caused targeted countries to implement loose monetary policy. We also find that the impact of trade conflict is not only effective in the current year, but also continues in the next five years. In addition, we show that the significant impact on monetary policy is manifested in non-OECD countries and transition countries but not in OECD countries and non-transition countries. Consequently, we believe our findings should shed light on those policy makers in target countries, who can hopefully prepare for potential trade conflict and avoid similar disputes from interfering with the effectiveness of monetary policies in the domestic economy by providing practical currency and valuation strategies. [ABSTRACT FROM AUTHOR]

This paper mainly presents a complete analysis of the impact of such sanctions on the innovation performance of target countries by exploiting the difference‐in‐differences method for panel data of 91 countries in the period 1988–2016. The empirical results confirm a significantly negative impact of overall international sanctions on innovation in the target countries; moreover, except for noneconomic sanctions, other types of sanctions have a negative impact on the level of innovation in the target countries to varying degrees. These findings are also supported by two semiparametric matchings: artificially matching according to the two factors of geographical location and land area respectively and the propensity score matching, one nonparametric matching: entropy balancing, as well as the system generalized method of moments estimates that account for any bias due to lagged dependent variables. This paper also shows that the significantly negative effect of international sanctions is manifested in the countries with high levels of trade openness, globalization, and democracy, but not in the countries with low levels of trade openness, globalization, and democracy. Our empirical findings merit particular attention from policy‐makers in target countries. [ABSTRACT FROM AUTHOR]

This research explores the impact of monetary policy on the growth rate of total factor productivity (TFPG) and innovation efficiency (IE) through panel data of 30 countries from 1983 to 2018 by the bias-corrected fixed-effect dynamic (BCFE) model. We find that tight monetary policy negatively impacts the growth rate of total factor productivity (TFPG) and innovation efficiency (IE), which is still valid after a series of robustness tests. We then perform sub-sample regressions, and the results show that countries with higher government efficiency, higher financial development, and stricter environmental policy can reduce the negative impact of tightening monetary policy on total factor productivity and innovation efficiency. Our research illustrates that a tightening monetary policy not only adversely impacts total factor productivity but also influences the main driving force of its growth-innovation efficiency. [ABSTRACT FROM AUTHOR]