In this paper we assess the empirical performance of commonly used empirical specifications of the baseline New Keynesian model for the US and the euro area. We estimate standard specifications of the model and extended specifications also including non-standard determinants of aggregate supply...

In this paper we assess the performance of the New Keynesian IS Curve for the G7 countries. We find that there is an IS puzzle for both the purely backwardlooking as well as for the forward-looking IS curve. The real interest rate does not have a significantly negative effect on the output gap....

This paper uses a factor-augmented vector autoregressive model (FAVAR) estimated on U.S. data in order to analyze monetary transmission via private sector balance sheets, credit risk spreads and asset markets in an integrated setup and to explore the role of monetary policy in the three...