EconPapers    
Economics at your fingertips  
 

The amplifier/divider mechanism of the financial cycle

Omar Chafik ()

International Economics and Economic Policy, 2020, vol. 17, issue 2, No 2, 363-380

Abstract: Abstract The financial cycle can play a decisive role in the transmission of monetary policy decisions. The impact of these decisions is amplified when the financial cycle is booming, and it is compressed when this cycle is busting. Considering this amplifier/divider mechanism in a semi-structural NKM, estimated for the US economy using Bayesian techniques, confirms this conclusion and improves the decision of raising or lowering the interest rate.

Keywords: Financial cycle; Monetary policy; New Keynesian model; Output gap; Bayesian estimation (search for similar items in EconPapers)
JEL-codes: C11 C32 E30 E50 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s10368-019-00448-z Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:iecepo:v:17:y:2020:i:2:d:10.1007_s10368-019-00448-z

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10368/PS2

DOI: 10.1007/s10368-019-00448-z

Access Statistics for this article

International Economics and Economic Policy is currently edited by Paul J.J. Welfens, Holger C. Wolf, Christian Pierdzioch and Christian Richter

More articles in International Economics and Economic Policy from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2021-03-28
Handle: RePEc:kap:iecepo:v:17:y:2020:i:2:d:10.1007_s10368-019-00448-z