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The Monetary Transmission Mechanism: Some Answers and Further Questions
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12

augustus 2024

2024/2025

A+
Three Measurement Challenges It is a task for empirical research to assess the macroeconomic impact of the various channels of monetary transmission and to look for changes in the channels’ strength over time. Empirical work on these issues, however, immediately comes up against a number of challenges. The first challenge is that of simultaneity. Typically, the Federal Reserve loosens policy when the economy weakens and tightens when the economy strengthens; this endogenous r...
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