The overstated effects of conventional monetary policy on output and prices

Matthias Enzinger, Sebastian Gechert, Philipp Heimberger, Franz Prante and Daniel F. Romero

No 264, I4R Discussion Paper Series from The Institute for Replication (I4R)

Abstract: We build a dataset of output and price effects of conventional monetary policy containing 146,463 point estimates and confidence bands from 4,871 impulse-response functions in 409 primary studies. Simple average responses suggest that interest rate hikes substantially dampen output and prices. However, we find robust evidence for publication bias. Bias corrections reduce effect sizes by half or more: in response to a 100 basis points rate hike, output and prices are unlikely to fall by more than 0.5 and 0.25 percent, respectively. Shock identification choices and publication characteristics correlate with effect sizes but are quantitatively less important than publication bias.

Keywords: Meta-analysis; conventional monetary policy; interest rate; output; inflation; price level; publication bias (search for similar items in EconPapers)
JEL-codes: C83 E32 E43 E52 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-mon
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Working Paper: The overstated effects of conventional monetary policy on output and prices (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:i4rdps:264

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