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Article: The asymmetric effects of monetary policy in general equilibrium.
- Article from:
- Journal of Centrum Cathedra
- Article date:
- September 1, 2008
- Author:
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Introduction
A fair amount of empirical research illustrates asymmetric effects of monetary policy for the United States and for most industrialized countries. Monetary policy displays asymmetric effects on output and inflation depending not only on the state of the economy, whether the output gap is positive or negative or whether inflation is high or low, but also on the sign and size of the monetary policy shock. On the theoretical side, the literature on asymmetric effects of monetary policy reflects two opinions: (a) asymmetric effects of monetary policy come from the convexity of the supply curve, and (b) asymmetry results from nonlinear effects of monetary ...