EconPapers    
Economics at your fingertips  
 

Asymmetric Effects of Monetary Policy

Lin Tzu-Yu ()
Additional contact information
Lin Tzu-Yu: Department of Economics, National Cheng Kung University, No.1, University Road, Tainan City 701, Taiwan

The B.E. Journal of Macroeconomics, 2021, vol. 21, issue 2, 425-447

Abstract: In this paper, we first use a structural vector autoregression model to examine whether the US economy responds asymmetrically to expansionary and contractionary monetary policies. The empirical results show that monetary policy has significant asymmetric effects on output and investment. To provide an explanation of such asymmetries, we consider a nonlinear dynamic stochastic general equilibrium (DSGE) model in which collateral constraints are occasionally binding over the business cycle. The nonlinear DSGE model is able to match the empirical findings that macroeconomic aggregates react asymmetrically to positive and negative monetary policy shocks.

Keywords: asymmetric effects; monetary policy; occasionally binding constraint (search for similar items in EconPapers)
JEL-codes: E52 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1515/bejm-2020-0084 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejmac:v:21:y:2021:i:2:p:425-447:n:14

Ordering information: This journal article can be ordered from
https://www.degruyter.com/view/j/bejm

DOI: 10.1515/bejm-2020-0084

Access Statistics for this article

The B.E. Journal of Macroeconomics is currently edited by Arpad Abraham and Tiago Cavalcanti

More articles in The B.E. Journal of Macroeconomics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().

 
Page updated 2021-08-02
Handle: RePEc:bpj:bejmac:v:21:y:2021:i:2:p:425-447:n:14