Monetary Policy and Sectoral Shocks : Did the Federal Reserve React Properly to the High-Tech Crisis?
The authors present an identification strategy that allows them to study the sectoral effects of monetary policy and the role that monetary policy plays in the transmission of sectoral shocks. They apply their methodology to the case of the United...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2003/11/2811632/monetary-policy-sectoral-shocks-federal-reserve-react-properly-high-tech-crisis http://hdl.handle.net/10986/17898 |
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okr-10986-178982021-04-23T14:03:40Z Monetary Policy and Sectoral Shocks : Did the Federal Reserve React Properly to the High-Tech Crisis? Raddatz, Claudio Rigobon, Roberto ACCOUNTING AGGREGATE DEMAND AUTOREGRESSION BENCHMARK CONSUMER PRICE INDEX ECONOMIC ANALYSIS EXOGENOUS SHOCKS EXOGENOUS VARIABLES FACTORS OF PRODUCTION FORECASTS GDP GDP DEFLATOR HUMAN CAPITAL INNOVATIONS INTEREST RATE INTEREST RATES MONETARY AUTHORITY MONETARY POLICY MONETARY POLICY RULE NET EXPORTS PRICE LEVELS REAL GDP REDISTRIBUTIVE EFFECTS STANDARD DEVIATION STOCK MARKETS TROUGH VAR MODELS MONETARY POLICY ECONOMETRIC MODELS MONETARY POLICY POLITICAL ASPECTS HIGH TECHNOLOGY INDUSTRIES REAL ESTATE INVESTMENT DURABLE GOODS INTEREST RATES ACCOUNTING STANDARDS TERRORISM FISCAL POLICY FEDERAL RESERVE SYSTEM The authors present an identification strategy that allows them to study the sectoral effects of monetary policy and the role that monetary policy plays in the transmission of sectoral shocks. They apply their methodology to the case of the United States and find some significant differences in the sectoral responses to monetary policy. They also find that monetary policy is a significant source of sectoral transfers. In particular, a shock to equipment and software investment, which one identifies with the high-tech crisis, induces a response by the monetary authority that generates a temporary boom in residential investment and durables consumption but has almost no effect on the high-tech sector. Finally, the authors perform an exercise evaluating the model's predictions about the automatic and more aggressive monetary policy response to a shock similar to the one that hit the United States in early 2001. They find that the actual drop in interest rates is in line with the predictions of the model. 2014-04-17T17:06:03Z 2014-04-17T17:06:03Z 2003-11 http://documents.worldbank.org/curated/en/2003/11/2811632/monetary-policy-sectoral-shocks-federal-reserve-react-properly-high-tech-crisis http://hdl.handle.net/10986/17898 English en_US Policy Research Working Paper;No. 3160 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING AGGREGATE DEMAND AUTOREGRESSION BENCHMARK CONSUMER PRICE INDEX ECONOMIC ANALYSIS EXOGENOUS SHOCKS EXOGENOUS VARIABLES FACTORS OF PRODUCTION FORECASTS GDP GDP DEFLATOR HUMAN CAPITAL INNOVATIONS INTEREST RATE INTEREST RATES MONETARY AUTHORITY MONETARY POLICY MONETARY POLICY RULE NET EXPORTS PRICE LEVELS REAL GDP REDISTRIBUTIVE EFFECTS STANDARD DEVIATION STOCK MARKETS TROUGH VAR MODELS MONETARY POLICY ECONOMETRIC MODELS MONETARY POLICY POLITICAL ASPECTS HIGH TECHNOLOGY INDUSTRIES REAL ESTATE INVESTMENT DURABLE GOODS INTEREST RATES ACCOUNTING STANDARDS TERRORISM FISCAL POLICY FEDERAL RESERVE SYSTEM |
| spellingShingle |
ACCOUNTING AGGREGATE DEMAND AUTOREGRESSION BENCHMARK CONSUMER PRICE INDEX ECONOMIC ANALYSIS EXOGENOUS SHOCKS EXOGENOUS VARIABLES FACTORS OF PRODUCTION FORECASTS GDP GDP DEFLATOR HUMAN CAPITAL INNOVATIONS INTEREST RATE INTEREST RATES MONETARY AUTHORITY MONETARY POLICY MONETARY POLICY RULE NET EXPORTS PRICE LEVELS REAL GDP REDISTRIBUTIVE EFFECTS STANDARD DEVIATION STOCK MARKETS TROUGH VAR MODELS MONETARY POLICY ECONOMETRIC MODELS MONETARY POLICY POLITICAL ASPECTS HIGH TECHNOLOGY INDUSTRIES REAL ESTATE INVESTMENT DURABLE GOODS INTEREST RATES ACCOUNTING STANDARDS TERRORISM FISCAL POLICY FEDERAL RESERVE SYSTEM Raddatz, Claudio Rigobon, Roberto Monetary Policy and Sectoral Shocks : Did the Federal Reserve React Properly to the High-Tech Crisis? |
| relation |
Policy Research Working Paper;No. 3160 |
| description |
The authors present an identification
strategy that allows them to study the sectoral effects of
monetary policy and the role that monetary policy plays in
the transmission of sectoral shocks. They apply their
methodology to the case of the United States and find some
significant differences in the sectoral responses to
monetary policy. They also find that monetary policy is a
significant source of sectoral transfers. In particular, a
shock to equipment and software investment, which one
identifies with the high-tech crisis, induces a response by
the monetary authority that generates a temporary boom in
residential investment and durables consumption but has
almost no effect on the high-tech sector. Finally, the
authors perform an exercise evaluating the model's
predictions about the automatic and more aggressive monetary
policy response to a shock similar to the one that hit the
United States in early 2001. They find that the actual drop
in interest rates is in line with the predictions of the model. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Raddatz, Claudio Rigobon, Roberto |
| author_facet |
Raddatz, Claudio Rigobon, Roberto |
| author_sort |
Raddatz, Claudio |
| title |
Monetary Policy and Sectoral Shocks : Did the Federal Reserve React Properly to the High-Tech Crisis? |
| title_short |
Monetary Policy and Sectoral Shocks : Did the Federal Reserve React Properly to the High-Tech Crisis? |
| title_full |
Monetary Policy and Sectoral Shocks : Did the Federal Reserve React Properly to the High-Tech Crisis? |
| title_fullStr |
Monetary Policy and Sectoral Shocks : Did the Federal Reserve React Properly to the High-Tech Crisis? |
| title_full_unstemmed |
Monetary Policy and Sectoral Shocks : Did the Federal Reserve React Properly to the High-Tech Crisis? |
| title_sort |
monetary policy and sectoral shocks : did the federal reserve react properly to the high-tech crisis? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2003/11/2811632/monetary-policy-sectoral-shocks-federal-reserve-react-properly-high-tech-crisis http://hdl.handle.net/10986/17898 |
| _version_ |
1764438437361876992 |