stimulus mostly generates inflation rather than output growth. To do this, I construct price-setting models with "volatility …Is monetary policy less effective at increasing real output during periods of high volatility than during normal times …? In this paper, I argue that greater volatility leads to an increase in aggregate price flexibility so that nominal …

stimulus mostly generates inflation rather than output growth. To do this, I construct price-setting models with "volatility …Is monetary policy less effective at increasing real output during periods of high volatility than during normal times …? In this paper, I argue that greater volatility leads to an increase in aggregate price flexibility so that nominal …

rate by 150 basis points causes output and inflation volatility to rise around 10% above their steady-state standard …We use a simple New Keynesian model, with firm specific capital, non-zero steady-state inflation, long-run risks and … Epstein-Zin preferences to study the volatility implications of a monetary policy shock. An unexpected increases in the policy …