The Transmission of Monetary Policy Shocks

Commonly used instruments for the identification of monetary policy disturbances are likely to combine true shock with information about state economy due disclosed through action. We show that this signaling effect can give rise empirical puzzles reported in literature, and propose a new high-frequency instrument shocks accounts informational rigidities. find tightening is unequivocally contractionary, deterioration domestic demand, labor credit market conditions as well asset prices agents’ expectations. (JEL D82, D84, E32, E43, E52, E58, G12)