Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152702
Authors: 
Mojon, Benoît
Angeloni, Ignazio
Terlizzese, Daniele
Kashyap, Anil K.
Year of Publication: 
2003
Series/Report no.: 
ECB Working Paper 268
Abstract: 
We revisit recent evidence on how monetary policy affects output and prices in the U.S. and in the euro area. The response patterns to a shift in monetary policy are similar in most respects, but differ noticeably as to the composition of output changes. In the euro area investment is the predominant driver of output changes, while in the U.S. consumption shifts are significantly more important. We dub this difference the output composition puzzle and explore its implications and several potential explanations for it. While the evidence seems to point at differences in consumption responses, rather than investment, as the proximate cause for this fact, the source of the consumption difference remains a puzzle.
Subjects: 
business cycles
Consumption
Investment
Monetary policy transmission
JEL: 
E21
E22
E30
E52
Document Type: 
Working Paper

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