Italian Economy Thrives as Monetary Policy Shocks Drive Growth.
The article examines how monetary policy shocks affected the Italian economy in the 1990s. The researchers used a structural VAR model to analyze the impact of these shocks. They found that the Bank of Italy targeted the rate on overnight interbank loans during this period. This targeting was consistent with the modeling choices made in the study. The researchers concluded that shocks to the overnight rate were exogenous monetary policy shocks and studied how they influenced the economy.