Inflation Dynamics of Financial Shocks

Research output: Contribution to journalArticleScientific


We study the effects of financial shocks on the United States economy by using a Bayesian structural vector autoregressive (SVAR) model that exploits the non-normalities in the data. We use this method to uniquely identify the model and employ inequality constraints to single out financial shocks. The results point to the existence of two distinct financial shocks that have opposing effects on inflation, which supports the idea that financial shocks are transmitted to the real economy through both demand and supply side channels.
Original languageEnglish
Number of pages15
Publication statusIn preparation - 5 Jun 2020
MoE publication typeB1 Journal article

Fields of Science

  • 511 Economics
  • econ.EM
  • econ.GN
  • q-fin.EC

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