Asymmetric Effects of Monetary Policy in the United States

Using M1, economists Morten Ravn and Martin Sola achieve results that match previous findings on the size and sign of monetary policy shocks: Positive shocks have larger real effects. Using the federal funds rate, however, they find that only small negative shocks affect real aggregate activity.


Keep up with what’s new and noteworthy at the St. Louis Fed. Sign up now to have this free monthly e-newsletter emailed to you.