Monetary Policy, Informality and Business Cycle Fluctuations in a Developing Economy Vulnerable to External Shocks

External Shocks, U.s. Monetary Policy and Macroeconomic Fluctuations in Emerging Markets

This paper uses a structural VAR model to quantify the extent of international dependence of several emerging markets in Asia and Latin America. A sizable fraction of macroeconomic fluctuations in emerging markets is attributable to external shocks (in many cases more than 50%). External factors are dichotomized into “U.S. monetary policy” and “everything else” shocks. This further decompositio...

The Effect of Monetary Policy on Business Cycles in Iran Economy

Nowadays one of the most important issues in our economy, both from economic and political view is the link between monetary policy and business cycle fluctuations. Amongst the shocks related to the supply side, the shock of oil price is the important factor that has affected the world economy since the 1970s. This paper examines the effects of monetary policy and oil price shocks on the busine...

Monetary Policy Effect on the Business Cycle Fluctuations: Output vs. Index Measures of the Cycle

The paper analyzes two questions: (i) the effect of monetary policy shock on business cycle and (ii) the extent to which a shift in a monetary policy affects the dynamics of business cycle. Unlike previous literature, to answer the questions, we measure the cycle movements by calculating an index from a number of aggregate macroeconomic series via a dynamic factor model. We find that monetary p...

Business Cycle Features In The Iranian Economy

Identification of Monetary Policy Shocks with External Instrument SVAR

We explore the use of external instrument SVAR to identify monetary policy shocks. We identify a forward guidance shock as the monetary shock component having zero instant impact on the policy rate. A contractionary forward guidance shock raises both future output and price level, stressing the relative importance of revealing policymakers’ view on future output and price level over committing ...