determined by the cyclical movements of the domestic output gap with the commodity shock being also the important source of … inflation variability while for the third country the contribution of the commodity shock dominates over the output gap in … explaining inflation fluctuations. We find that the direct impact of the global demand shock on the price dynamics is negligible …

macroeconomic variables in response to the domestic demand shock, the foreign demand and financial shocks and the terms …-of-trade shock at the ZLB. This effects become severe in response to highly persistent shocks which leads to stronger reaction of …