Monetary policy transmission : a reference guide through ESCB models and empirical benchmarks

This paper functions as a reference guide for the impact of "standard" monetary policy shocks on output and prices, as analysed through the lens of the available models in the European System of Central Banks (ESCB) and the average findings of existing empirical literature. The analysis is based on harmonised simulation exercises performed with ESCB models that are routinely used for policy analysis, with the aim of casting light on the range of impacts and sources of heterogeneity in the transmission of "standard" monetary policy shocks across models. The simulation results are compared with those obtained from a meta-analysis of empirical works focusing on the euro area. The study is complemented by selected works on heterogeneity and non-linearities in the monetary transmission mechanism as captured by empirical models.