The Macro Effects of the Recent Swing in Financial Conditions

Marco Del Negro, Marc Giannoni and Micah Smith

No 20160525, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Credit conditions tightened considerably in the second half of 2015 and U.S. growth slowed. We estimate the extent to which tighter credit conditions last year were responsible for the slowdown using the FRBNY DSGE model. We find that growth would have slowed substantially more had the Federal Reserve not delayed liftoff in the federal funds rate.

Keywords: DSGE; Monetary Policy; Spreads; Financial Conditions (search for similar items in EconPapers)
JEL-codes: E2 E5 G1 (search for similar items in EconPapers)
Date: 2016-05-25
New Economics Papers: this item is included in nep-mac and nep-mon
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