Monetary policy in an uncertain world
Date
2025-07
Authors
Soria, Matias Gonzalo
relationships.isContributorOfPublication
García Cicco, Javier
Journal Title
Journal ISSN
Volume Title
Publisher
Universidad de San Andrés. Departamento de Economía
Abstract
Monetary policy has been a central tool for policymakers in contexts of high uncertainty, as well as in periods of relative calm. This article examines how the effects of monetary policy vary under different levels of uncertainty. A New Keynesian DSGE model with recursive preferences is solved using perturbation methods, and its response to a monetary policy shock is characterized under the presence of stochastic volatility. The model is contrasted with the data by estimating the same responses through local projections regressions. Both exercises suggest that monetary shocks have more pronounced effects under high uncertainty. The article concludes by discussing extensions aimed at improving the model’s fit with the data.
Description
Fil: Soria, Matias Gonzalo. Universidad de San Andrés. Departamento de Economía; Argentina.