In this paper two shocks are analysed using Canadian data: a money-supply shock ("M-shock") and an interest-rate shock ("R-shock"). Money-supply shocks are derived using long-run restrictions based on long-run propositions of monetary theory. Thus, an M-shock is represented by an orthogonalized...

Note: The following is a description of the paper and not the abstract as published in the print journal. In this paper new evidence on the transmission of monetary policy shocks across the G-6 countries is presented. Monetary shocks are identified as those that have a proportionate effect on...

There appears to be a disconnect between the importance of the zero bound on nominal interest rates in the real-world and predictions from quantitative DSGE models. Recent economic events have reinforced the relevance of the zero bound for monetary policy whereas quantitative models suggest that...

The menu-cost models of price adjustment developed by Ball and Mankiw (1994; 1995) predict that short-run movements in inflation should be positively related to the skewness and the variance of the distribution of disaggregated relative-price shocks in each period. We test these predictions on...