We present two empirical conundrums on the nature of international policy transmission. First, there has been a qualitative shift in the impact of U.S. monetary and fiscal policy shocks on other economies after 1990. Second, the reactions to monetary shocks are particularly difficult to reconcile with standard new open-economy theories, even with several significant modifications to the benchmark model. This raises the question as to whether the theoretical reference point on which welfare analysis and policy prescriptions are based remains appropriate for policy analysis in recent decades.