In 2001, the Fed has lowered interest rates in a series of cuts, starting from 6.5 per cent at the end of 2000 to 2 … September 2001. Monetary policy shocks are identified, using the new sign restriction methodology of Uhlig (1999), imposing the … and output. We find that neither the Fed policy choices in 2001 nor those of 2000 were surprising. We provide a method to …