volatility. Since exchange rate volatility is not observed, we estimate it alongside the remaining quantities in the model. Our … increase in exchange rate volatility. Historical and forecast error variance decompositions indicate that monetary policy … shocks explain an appreciable amount of exchange rate movements and the corresponding volatility. …

Epstein-Zin preferences to study the volatility implications of a monetary policy shock. An unexpected increases in the policy … volatility effects of the shock are driven by agents' concern about the (in)ability of the monetary authority to reverse … rate by 150 basis points causes output and inflation volatility to rise around 10% above their steady-state standard …

- empirical support for his hypothesis is at best mixed. I argue that the failure to discover overshooting may result from …