-term inflation volatility in response to exogenous shocks can be optimal; that the optimal response to adverse financial shocks is to … lower interest rates, if not at the zero bound, and to engineer a short period of inflation; that the Taylor rule may …

This paper decomposes the time-varying effect of exogenous exchange rate shocks on euro area countries inflation into … quarters of the past six years, especially in turning point periods. Our main results indicate that headline inflation in euro … inflation this increasing sensitivity is solely reliant on a sustained surge in the degree of comovement, for energy inflation …

persistent movements of aggregate inflation. Moreover, the impact of a monetary policy shock on unemployment and inflation … cycle model. In particular, we analyze the effect of a monetary policy shock and investigate how labor market frictions … employment and hours affecting inflation dynamics via marginal costs. We find that the response of unemployment and inflation to …

linked to the monetary policy regime. Before and after the "Great Inflation", nominal wages moved in the same direction as … the (required) adjustment of real wages, and in the opposite direction of the price response. During the "Great Inflation … increasing inflation volatility. Using a standard DSGE model, we show that these stylized facts, in particular the estimated …

policy analysis, extended to include aggregate banking sector variables. We estimate two shocks affecting the euro area … economy, namely a demand shock and a shock to bank capital. The main findings of the paper are as follows: i) Impulse …-response analysis shows that in response to a shock to bank capital, banks boost capital ratios by reducing their relative exposure to …

future prospects of the economy and the profitability of the banking sector, were strongly present in the post-crisis period …

We augment a standard monetary DSGE model to include a banking sector and financial markets. We fit the model to Euro … intermediation turns an otherwise diversifiable source of idiosyncratic economic uncertainty, the ‘risk shock’, into a systemic force …