output. With strong risk sharing, the response is attenuated, and output reverts to its initial level over the medium term … against persistent output contractions after tightening shocks. …

We show that the impact of supply and monetary policy shocks on consumer prices is state-dependent. First, we let the … exhibit a more substantial and more persistent effect on downstream prices during periods of elevated inflation volatility … effective in State 2. Exogenously differentiating regimes by the level of inflation or the shock size does not reveal state …