Monetary policy shocks linked to 15% rise in unemployment and inflation volatility.
The article explores how changes in interest rates affect economic stability. By analyzing data from the US, the researchers found that a 1% increase in interest rates leads to a 15% increase in unemployment and inflation volatility. They used a model that considers factors like job uncertainty and the ability of the government to control economic deviations. The study shows that people's fears of losing their jobs and doubts about the government's ability to stabilize the economy contribute to this increased volatility.