This paper examines the responses of prices at different stages of production to an explicitly identified demand shock …: a monetary policy shock. The frameworks of Christiano, Eichenbaum, and Evans (1994, 1996) and Sims and Zha (1995b) are … used to identify the policy shock as the innovation to the federal funds rate in a VAR. The adjustment of prices at …

We investigate the relationship between inflation uncertainty and monetary policy transmission in the U.S. economy … through the external finance premium and the term structure of interest rates appears strongly dependent on inflation …