Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/26089 
Year of Publication: 
2007
Series/Report no.: 
CESifo Working Paper No. 2044
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
A widely spread belief among economists is that monetary policy has relatively short-lived effects on real variables such as unemployment. Previous studies indicate that monetary policy affects the output gap only at business cycle frequencies, but the effects on unemployment may well be more persistent in countries with highly regulated labor markets. We study the Swedish experience of unemployment and monetary policy. Using a structural VAR we find that around 30 percent of the fluctuations in unemployment are caused by shocks to monetary policy. The effects are also quite persistent. In the preferred model, almost 30 percent of the maximum effect of a shock still remains after ten years.
JEL: 
J60
E24
Document Type: 
Working Paper
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