Monetary policy transmits through broad financial conditions--interest rates, asset prices, credit spreads and exchange … rate. We introduce FCI*, the neutral level of financial conditions that closes expected output gaps, within a framework … where financial conditions and macroeconomic shocks drive economic activity with inertia. Conceptually, FCI* reflects …

Given the prevailing global circumstances, characterized by tightening global financial conditions and substantial … macro-financial vulnerabilities, the significance of monitoring financial conditions becomes even more pronounced and calls …, the paper examines the transmission of monetary policy and financial conditions shocks to the real economy, by capturing …