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 …. - DSGE model ; Financial frictions ; Financial shocks ; Bayesian estimation ; Lending channel ; Funding channel …

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 …

Monetary DSGE models are widely used because they fit the data well and they can be used to address important monetary … policy questions. We provide a selective review of these developments. Policy analysis with DSGE models requires using data …

We augment a standard monetary DSGE model to include a Bernanke-Gertler-Gilchrist financial accelerator mechanism. We … refer to this measure of volatility as 'risk'. We find that fluctuations in risk are the most important shock driving the …