TY - JOUR
T1 - The effects of monetary policy shocks
T2 - Evidence from the flow of funds
AU - Christiano, Lawrence J.
AU - Eichenbaum, Martin
AU - Evans, Charles
PY - 1996/1/1
Y1 - 1996/1/1
N2 - This paper assesses the impact of a monetary policy shock on the U.S. economy. Our measures of contractionary monetary policy shocks are associated with (i) a fall in various monetary aggregates and a rise in the federal funds rate, (ii) declines in different measures of real activity, (iii) sharp declines in commodity prices and a delayed decline in the GDP price deflator. In addition, net funds raised by the business sector increases for roughly a year, after which it falls. Finally, we find that households do not adjust their financial assets and liabilities for several quarters after a monetary shock.
AB - This paper assesses the impact of a monetary policy shock on the U.S. economy. Our measures of contractionary monetary policy shocks are associated with (i) a fall in various monetary aggregates and a rise in the federal funds rate, (ii) declines in different measures of real activity, (iii) sharp declines in commodity prices and a delayed decline in the GDP price deflator. In addition, net funds raised by the business sector increases for roughly a year, after which it falls. Finally, we find that households do not adjust their financial assets and liabilities for several quarters after a monetary shock.
UR - http://www.scopus.com/inward/record.url?scp=0030527779&partnerID=8YFLogxK
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U2 - 10.2307/2109845
DO - 10.2307/2109845
M3 - Article
AN - SCOPUS:0030527779
SN - 0034-6535
VL - 78
SP - 16
EP - 34
JO - Review of Economics and Statistics
JF - Review of Economics and Statistics
IS - 1
ER -