The macroeconomic effects of monetary policy and financial crisis

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper we focus on postwar US data and incorporate new nancial measures and monetary policy shocks in a vector autoregression (VAR) system in order to test whether one or the other has any real effect on the economy. We nd econometric evidence that these shocks and events are exogenous, and therefore the exogenous nature of shocks to monetary policy and stock market crashes investigated in this study may help policymakers, especially regarding debates related to eventual relationships between optimal monetary policy and nancial stability.

Keywords: Financial crisis; monetary policy (search for similar items in EconPapers)
JEL-codes: E5 G1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-mon
Date: Written 2005-05-01
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