IS BIGGER MORE EFFECTIVE? SHOCK SIZE AND THE EFFICACY OF MONETARY POLICY

Toyoichiro Shirota

Macroeconomic Dynamics, 2022, vol. 26, issue 8, 2204-2215

Abstract: This study empirically examines whether shock size matters for the US monetary policy effects. Using a nonlinear local projection method, I find that large monetary policy shocks are less powerful than smaller monetary policy shocks, with the information effect being the potential source of the observed asymmetry in monetary policy efficacy.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:cup:macdyn:v:26:y:2022:i:8:p:2204-2215_8

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