Monetary policy shocks have medium-sized real effects on historical fluctuations.
The study compares the effects of monetary policy shocks using different methods. By considering specific factors like contractionary impetus and lag length, the real effects of policy shocks are found to be consistent and likely medium-sized. Alternative measures from estimated Taylor rules also show significant historical contributions of monetary policy shocks to real fluctuations, especially in the 1970s and early 1980s.