We assess the effects of financial shocks on inflation, and to what extent financial shocks can account for the … shocks through sign restrictions. Our main finding is that expansionary financial shocks temporarily lower inflation. This … during the latest financial crisis. We then explore the transmission channels of financial shocks relevant for inflation, and …

shocks and study their effects on financial variables and macro variables. The first shock resembles a conventional monetary … policy shock, and the second resembles an unconventional monetary shock. The third shock leads to an increase in interest … and uncertainty decrease, and the U.S. dollar depreciates. Therefore, this third shock combines all the characteristics of …

We quantify spillovers of inflation expectations between the United States (US) and Euro Area (EA) based on break …-even inflation (BEI) rates. In contrast to previous studies, we model US and EA BEI rates jointly in a structural vector … autoregressive (SVAR) model. The SVAR approach allows to identify US and EA specific inflation expectations shocks. By modeling the …

stability. We model the default of a large bank and analyse the resulting contagion effects. This is compared to a common shock …

This paper studies the effects of three financial shocks in the economy: a net-worth shock, an uncertainty or risk … shock, and a credit-spread shock. We argue that only the latter can push the nominal interest rate against its zero lower … bound. Further, a recessionary shock to the net worth or the credit spread generates a positive response for loans, which is …

combined with the theory of optimum currency areas. It shows how since the turn of the millennium a too expansionary monetary …

model averaging in policy design. Interestingly, a simple difference rule with the same coefficients on inflation and output …