Effect of a monetary policy shock is volatile over time
Report finds similar shocks have different effects over time
A working paper published this week by the Federal Reserve Bank of Richmond uses 100 years of US economic data to try and isolate the impact of monetary policy shocks – finding that the effect of an ‘average' monetary policy shock on the economy has changed dramatically over time.
In the paper, Drifts, volatilities, and impulse responses over the last century, Pooyan Amir-Ahmadi, Christian Matthes and Mu-Chun Wang ask whether "unexpected changes in monetary policy that had a certain effect at
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