Using indirect inference based on a VAR we confront US data from 1972 to 2007 with a standard New Keynesian model in … Acceleration and the Great Moderation. The implication is that changing variances of shocks caused the reduction of volatility …. Smaller Fed policy errors accounted for the fall in inflation volatility. Smaller supply shocks accounted for the fall in …

How does a monetary union work when labour markets are heterogeneous? Since shocks are transmitted via both trade links … aggregate shocks both for the variability of aggregate output and inflation. Considering the effects on country specific output …

aggregate shocks. The implications of asymmetries for both the overall performance of the monetary union and the country … fall on small countries. In the case of country-specific shocks, a country unambiguously benefits in terms of macroeconomic … stability by becoming more flexible, while this is not necessarily the case for aggregate shocks. There may thus be a tension …