I use a Bayesian vector autoregressive (VAR) model to investigate the impact of monetary and technology shocks on the … euro area stock market in 1987-2005. I find an important role for technology shocks, but not monetary shocks, in explaining … variations in real stock prices. The identification method is flexible enough to study the effects of technology news shocks. The …

potentially large but short-lived response in output. Shocks to government spending and technology lead to persistent changes in … output but the percentage change in output is predicted to be smaller than the percentage changes in spending or technology …, government spending, and technology shocks. These comparisons confirm the theoretical findings. In response to observed changes …