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Assessments of the risks to financial stability often focus on the degree of leverage in the system. In this report, however, we question whether subdued leverage of financial intermediaries is suffic...
The “Price Puzzle” under Changing Monetary Policy Regimes
Federal Funds Rate Monetary Policy Shocks Price Puzzle Vector Autoregressions (VARs) United States
2013/2/23
This paper examines the “price puzzle”, the rise in the price level following a contractionary monetary policy shock, using monthly US data from 1960 to 2006. Deviating from the standard practice is i...