Does monetary policy generate recessions?

Christopher Sims () and Tao Zha ()

No 98-12, Working Paper from Federal Reserve Bank of Atlanta

Abstract: The issue of uncovering the effects of monetary policy is far short of resolution. In the identified VAR literature, restrictions have been imposed to identify the effects of unpredictable monetary policy disturbances. We offer critical views on the unreasonable assumptions in the existing work and argue for careful economic argument about identifying assumptions. We display a structural stochastic equilibrium model in which our VAR identification would produce correct results while drawing attention to the serious lack of time series fit in most of the DSGE literature.

Keywords: Monetary; policy (search for similar items in EconPapers)
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Date: 1998
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Related works:
Journal Article: DOES MONETARY POLICY GENERATE RECESSIONS? (2006)
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