Open AccessPosted Content
Monetary Policy Shocks: What Have We Learned and to What End?
Reads0
Chats0
TLDR
The authors reviewed recent research that grapples with the question: What happens after an exogenous shock to monetary policy? They argue that this question is interesting because it lies at the center of a particular approach to assessing the empirical plausibility of structural economic models that can be used to think about systematic changes in monetary policy institutions and rules.Abstract:
This paper reviews recent research that grapples with the question: What happens after an exogenous shock to monetary policy? We argue that this question is interesting because it lies at the center of a particular approach to assessing the empirical plausibility of structural economic models that can be used to think about systematic changes in monetary policy institutions and rules. The literature has not yet converged on a particular set of assumptions for identifying the effects of an exogenous shock to monetary policy. Nevertheless, there is considerable agreement about the qualitative effects of a monetary policy shock in the sense that inference is robust across a large subset of the identification schemes that have been considered in the literature. We document the nature of this agreement as it pertains to key economic aggregates.read more
Citations
More filters
Journal ArticleDOI
Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy
TL;DR: In this article, the authors present a model embodying moderate amounts of nominal rigidities that accounts for the observed inertia in inflation and persistence in output, and the key features of their model are those that prevent a sharp rise in marginal costs after an expansionary shock to monetary policy.
Journal ArticleDOI
Shocks and Frictions in US Business Cycles: A Bayesian DSGE Approach
TL;DR: Using a Bayesian likelihood approach, the authors estimate a dynamic stochastic general equilibrium model for the US economy using seven macroeconomic time series, incorporating many types of real and nominal frictions and seven types of structural shocks.
Journal ArticleDOI
Shocks and frictions in US business cycles: A Bayesian DSGE approach
Frank Smets,Rafael Wouters +1 more
TL;DR: In this paper, a dynamic stochastic general equilibrium (DSGE) model for the US economy is proposed, which incorporates many types of real and nominal frictions: sticky nominal price and wage setting, habit formation in consumption, investment adjustment costs, variable capital utilisation and fixed costs in production.
Posted Content
Nominal rigidities and the dynamic effects of a shock to monetary policy
TL;DR: The authors present a model embodying moderate amounts of nominal rigidities which accounts for the observed inertia in inflation and persistence in output, and the key features of their model are those that prevent a sharp rise in marginal costs after an expansionary shock to monetary policy.
References
More filters
Journal ArticleDOI
Macroeconomics and reality
TL;DR: In this article, the authors argue that the style in which their builders construct claims for a connection between these models and reality is inappropriate, to the point at which claims for identification in these models cannot be taken seriously.
Book ChapterDOI
Time Series Analysis
TL;DR: This paper provides a concise overview of time series analysis in the time and frequency domains with lots of references for further reading.
Posted Content
Inside the Black Box: The Credit Channel of Monetary Policy Transmission
TL;DR: The credit channel theory of monetary policy transmission holds that informational frictions in credit markets worsen during tight money periods and the resulting increase in the external finance premium enhances the effects of monetary policies on the real economy as discussed by the authors.
Book
A Monetary History of the United States
Milton Friedman,Anna J. Schwartz +1 more
TL;DR: The long-awaited monetary history of the United States by Friedman and Schwartz is in every sense of the term a monumental scholarly achievement as discussed by the authors, and the treatment of innumerable issues, large and small, have been brought to bear on the solution of complex and subtle economic issues.
Posted Content
The Federal Funds Rate and the Channels of Monetary Transnission
TL;DR: The authors showed that the interest rate on the Federal Funds is extremely informative about future movements of real macroeconomic variables, more so than monetary aggregates or other interest rates, and argued that the reason for this forecasting is that the funds rate sensitively records shocks to the supply of (not the demand for) bank reserves.