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Does Monetary Policy Matter? Narrative Versus Structural Approaches

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  • Ray C. Fair

Abstract

This paper compares results from the narrative approach of Romer and Romer (1989) to those from the structural approach regarding the effects of monetary policy on real output. The results from both approaches lead to the conclusions that monetary policy matters and that the effects build slowly following a monetary policy shock. The narrative approach, however, leads to larger and more persistent effects than does the structural approach. Reasons are advanced in the paper as to why this might be so.

Suggested Citation

  • Ray C. Fair, 1989. "Does Monetary Policy Matter? Narrative Versus Structural Approaches," NBER Working Papers 3045, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3045
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    1. Christina D. Romer & David H. Romer, 1989. "Does Monetary Policy Matter? A New Test in the Spirit of Friedman and Schwartz," NBER Chapters, in: NBER Macroeconomics Annual 1989, Volume 4, pages 121-184, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Hukkinen, Juhana & Virén, Matti, 1995. "Assessing the performance of a macroeconomic model," Research Discussion Papers 5/1995, Bank of Finland.
    2. repec:zbw:bofrdp:1995_005 is not listed on IDEAS
    3. Hukkinen, Juhana & Viren, Matti, 1999. "Assessing the Forecasting Performance of a Macroeconomic Model," Journal of Policy Modeling, Elsevier, vol. 21(6), pages 753-768, November.
    4. Virén, Matti, 1990. "An analysis of advance effects of anticipated policy actions : Recent results with the finnish MICRO-QMED model," Research Discussion Papers 15/1990, Bank of Finland.
    5. Hukkinen, Juhana & Virén, Matti, 1996. "Assessing the forecasting performance of a macroeconomic model," Research Discussion Papers 23/1996, Bank of Finland.
    6. Simon, Carl Nally Regi, 2017. "Les canaux de transmission de la politique monetaire en Haiti: une approche narrative (1996-2016) [Monetary transmission channels in Haiti: a narrative approach (1996-2016)]," MPRA Paper 78294, University Library of Munich, Germany.
    7. repec:zbw:bofrdp:1990_015 is not listed on IDEAS
    8. Hukkinen, Juhana & Virén, Matti, 1995. "Assessing the performance of a macroeconomic model," Bank of Finland Research Discussion Papers 5/1995, Bank of Finland.
    9. repec:zbw:bofrdp:1996_023 is not listed on IDEAS

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