Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152662
Authors: 
Klaeffling, Matt
Year of Publication: 
2003
Series/Report no.: 
ECB Working Paper 228
Abstract: 
VAR studies of the effects of monetary policy on output suggest that a contractionary impulse results in a drawn-out, hump-shaped response of output. Standard structural economic models are generally not able to reproduce such a response. In this paper I look at nonfundamental representations that are observationally equivalent to a VAR. I find that the quantitative effect of a monetary policy shock on output might be much smaller and much more short-lived than the VAR studies suggest. I conclude that the apparent discrepancy between the VAR findings and standard structural models may be spurious and that the general tendency to append non-structural, ad hoc features to structural models should be questioned.
JEL: 
C12
E52
Document Type: 
Working Paper

Files in This Item:
File
Size
514.25 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.