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Tuesday, August 4, 2020 | History

2 edition of Monetary policy shocks found in the catalog.

Monetary policy shocks

Lawrence J. Christiano

Monetary policy shocks

what have we learned and to what end?

by Lawrence J. Christiano

  • 338 Want to read
  • 16 Currently reading

Published by National Bureau of Economic Research in Cambridge, MA .
Written in English

    Subjects:
  • Monetary policy -- Econometric models.

  • Edition Notes

    StatementLawrence J. Christiano, Martin Eichenbaum, Charles L. Evans.
    SeriesNBER working paper series -- working paper 6400, Working paper series (National Bureau of Economic Research) -- working paper no. 6400.
    ContributionsEichenbaum, Martin S., Evans, Charles, 1958-, National Bureau of Economic Research.
    The Physical Object
    Pagination77, [14] p. :
    Number of Pages77
    ID Numbers
    Open LibraryOL22403890M

    Against this backdrop, the monetary policy for aims to achieve the ambitious 7 percent economic growth target set by the government, maintain adequate liquidity, limit inflation at 7 percent, encourage the merger of banks and financial institutions, enhance access to finance, and promote reliable digital transactions. In other words, they would have generated a monetary policy that was similar to the actual policy over this period. Thus, a mistake about the trend growth rate could be large enough to take us from the low inflation rate of the s to the high inflation rate of the s.

    More specifically, we use the high-frequency identification method that was pioneered by Cook and Hahn () and extended in Nakamura and Steinsson (). In this Economic Commentary, we directly use the monetary policy shocks data constructed in Nakamura and Steinsson (), which can be found at ~enakamura/ Motivation Model Linear equilibrium Monetary Policy Welfare Transparency Expectations and cycles Ingredients Model of “fundamental” and “sentiment” shocks (Lorenzoni ()) • Fundamental information is dispersed across the economy • Agents know “potential output” in .

    ‘In this book the authors provide a comprehensive review of optimal monetary policy in the context of small, log-linear, macroeconomic models that are subject to stochastic shocks I think the book provides a very good introduction to the literature on optimal monetary policy (in short-run models) for non-specialists and students. Monetary Policy and the Economy in South Africa covers both modern theories and empirical analysis, linking monetary policy with relating house wealth, drivers of current account based on asset approach, expenditure switching and income absorption effects of monetary policy on trade balance, effects of inflation uncertainty on output growth and international spill overs.


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Monetary policy shocks by Lawrence J. Christiano Download PDF EPUB FB2

Macroeconomic Shocks and Unconventional Monetary Policy: Impacts on Emerging Markets brings together the most up-to-date knowledge impacts of recent macroeconomic shocks on Asia's real economy; the spillover effects of macroeconomic shocks on financial markets and flows in Asia; and key challenges for monetary, exchange rate, trade and macro.

Monetary Policy and Macroeconomic Shocks: Specification, Estimation and Analysis of Monetary Policy Reaction Function: A case of Ethiopia [Zerayehu Sime Eshete] on *FREE* shipping on qualifying offers.

The study examined responses of Central Bank of Ethiopia to macroeconomic shocks. Macroeconomic shocks in Ethiopia (until ) mainly came from non-monetary Author: Zerayehu Sime Eshete.

Abstract: We characterize the role of a central bank as a mechanism designer for risk-sharing across banks that are subject to privately observed “liquidity shocks.” The optimal mechanism involves borrowing/lending from a “discount window.” The optimal discount rate and the induced distortions in holdings of liquid assets suggest a rationale for subsidized lending and reserve Cited by: what happens in the actual economy after a shock to monetary policy.

The literature explores three general strategies for isolating monetary policy shocks. The first is the primary focus of our analysis.

TheMoneyIllusion» Do monetary shocks matter. And what is. The second scheme assumes a recursive structure and implies that monetary policy shocks have no contemporaneous impact on unemployment and inflation but can affect the term spread immediately.

Monetary policy shocks book Finally, we follow Gertler and Karadi () and identify the monetary policy shock using an external instrument.

This version of the model uses the 1. Macroeconomic Shocks and Their Propagation73 The topic of Section 3 is monetary shocks and their effects on the macroeconomy.

explores the effects of several leading monetary shocks in a framework that incorporates some of the newer innovations. monetary developments. First, common shocks to money of a global scale might Recently, there has been an increasing interest in the sources of international business fluctuations on the one hand, and in the role played by international spillovers of monetary policy shocks on the other hand.

Mounting evidence suggest. government budget (expenditure) and taxes, –scal policy intertemporal allocation/ –nance: savings, assets, asset prices money, interest rates, exchange rates, monetary policy 3 Major Crises and the design of macroeconomics policies The Great Depression of the.

Mark Sadowski recently discussed a study by Harald Uhlig on the effects of monetary shocks on RGDP. Uhlig didn’t find much effect. I suggested that there is a severe identification problem, and. Specifically, we use sign restrictions to identify a government revenue shock as well as a government spending shock, while controlling for a generic business cycle shock and a monetary policy shock.

We explicitly allow for the possibility of announcement effects, i.e., that a current fiscal policy shock changes fiscal policy variables in the. a monetary policy shock to an interest rule can be replicated by an appropriately parameterized money growth rule reacting solely to inflation and output.

This sug-gests a broad monetary aggregate could be used as the indicator of monetary policy in a recursive VAR for the purpose of identifying monetary policy shocks, even if.

the structural shocks is assumed to be the monetary policy shock of interest. We can order things such that this is the rst structural shock. The VAR can be written in terms of the structural shocks as, Yt = B(L)S"t (3) Call the rst column of S, ®; this is the column corresponding to the policy shock.

Downloadable. Despite years of research, there is still uncertainty around the effects of monetary policy shocks. We reassess the empirical evidence by combining a new identification that accounts for informational rigidities, with a flexible econometric method robust to misspecifications that bridges between VARs and Local Projections.

We show that most of the lack of robustness of the. First, following a contractionary shock to monetary policy, net funds raised by the business sector increases for roughly a year. Thereafter, as the recession induced by the policy shock gains momentum, net funds raised by the business sector begins to fall.

This pattern is not captured by existing monetary business cycle models. Eq. (2) can be identified by recognizing that the monetary policy shocks (m t and n t) occur only in exogenously identified monetary policy months and can thus be separated from the common shock, a t. The two monetary policy shocks are mutually exclusive and can hence also be exogenously separated.

Alternative monetary policy shock measures from estimated Taylor rules also yield medium-sized real effects and indicate that the historical contribution of monetary policy shocks to real fluctuations has been significant, particularly during the s and early.

the new monetary policy shock as the series of estimated coe cients from the Fama-MacBeth style second step regressions. The application of this procedure to estimating monetary policy shocks is novel as far as we are aware,3 and has non-trivial e ects on the resulting measure.

Monetary policy is policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often as an attempt to reduce inflation or the interest rate to ensure price stability and general trust of the value and stability of the nation's currency.

Shocks • Monetary policy should try to minimize the difference between inflation and the inflation target • In the case of both demand shocks and permanent supply shocks, policy makers can simultaneously pursue price stability and stability in economic activity • Following a temporary supply shock, however, policy makers can.

Importantly, while monetary policy can combat demand shocks, it can do nothing to cushion the impact of reductions in supply without sacrificing the commitment to price stability.

The coronavirus shock involves some as-yet-unknown mix of these two very different types of shocks.Abstract. In this paper we document the effects of monetary policy shocks on real commodity prices.

Based on a VAR estimated using long-run restrictions, an expansionary monetary policy shock causes real commodity prices and output both to rise sharply for a short period of time.This paper investigates the effects of shocks to U.

S. monetary policy on exchange rates. In sharp contrast to the literature we find substantial evidence of a link between monetary policy and ex- change rates. Specifically, according to our results a contractionary shock to U.

S. monetary policy leads to (i) persistent, significant.