Shah, I., H., Morlet, G., Baird, H., 2025. Transatlantic Spillover Effects of Unexpected Federal Reserve Monetary Policy Decisions on European Equity Returns. Available on SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5344182. [Under Review at Journal of Multinational Financial Management]
This paper assesses the impact of unexpected US monetary policy announcements on returns in European equity markets, focusing on the divergence in market responses during conventional and unconventional policy periods. We dissect 156 FOMC announcements between 2000 and 2018, considering five leading European stock indices. Monetary policy surprises are decomposed into target surprises, quantifying instant adjustments to the Fed’s target rate, and path surprises, capturing changes in expectations for future policy directions. Our baseline empirical methodology leverages within-year and within-equity index variation.Path surprises have a statistically significantly negative influence on European equity returns. This impact is significantly more negative during unconventional policy periods. Results highlight that market responses are increasingly driven by expectations of future monetary policy actions. These findings emphasise the global spread of US monetary policy and implications for global financial stability. They highlight the need for enhanced international coordination of monetary and financial policies.
Shah, I., H., Morlet, G., 2025. The Gender Gap in Multiple Choice Question versus Constructed Response Question Examination Grades [Under Review at SAGE Open]
Success in university examinations can be crucial for students’ future employment outcomes. Exam format influences performance asymmetrically across genders. This paper thus analyses the gender gap in student performance across two assessment formats: multiple-choice questions (MCQs) and constructed response questions (CRQs). Using data from undergraduate and postgraduate modules at a large UK university across the 2020/1 to 2022/3 academic years, we examine whether gender grade discrepancies arise in each exam format. We leverage variation within academic years, modules and degree programmes, comparing grades in online MCQ and in-person CRQ assessments.
Both parametric linear and non-parametric local constant regressions yield aligned inference: we do not find that women perform differently from men in online MCQ tests. However, women significantly outperform men in CRQ exams by 0.2 standard deviations. There is no heterogeneity in this relationship across ethnicities, however this overperformance is more pronounced at the undergraduate level. Quantile regressions further show this outperformance stems from lower grade quantiles. A 2023/24 robustness check using an in-person exam containing both MCQs and CRQs confirms the observed gender gap in baseline results stems from question format rather than mode of delivery. Our findings underscore the need consider exam format to equitably accommodate diverse strengths.