Publication
19 Jun 2013
This paper investigates the effects of uncertainty shocks on economic activity. The authors use a Dynamic Stochastic General Equilibrium (DSGE) model with different agents and a stylized banking sector to show that frictions in credit supply amplify the effects of uncertainty shocks on economic activity. They argue that this amplification stems mainly from the resistance to change in banking retail interest rates, which reduces the effectiveness in the transmission mechanism of monetary policy.
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English (PDF, 46 pages, 601 KB) |
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Author | Dario Bonciani, Björn van Royey |
Series | Kiel Institute Working Papers |
Issue | 1843 |
Publisher | Kiel Institute for the World Economy |
Copyright | © 2013 Kiel Institute for the World Economy |