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 …

persistent movements of aggregate inflation. Moreover, the impact of a monetary policy shock on unemployment and inflation … cycle model. In particular, we analyze the effect of a monetary policy shock and investigate how labor market frictions … employment and hours affecting inflation dynamics via marginal costs. We find that the response of unemployment and inflation to …

good inflation. In addition, the Ramsey optimal monetary policy can be approximated reasonably well with a Taylor …-type interest rate rule with weights on both inflation rates and output. -- Inflation and Output Persistence ; Monetary Policy …