The article explores how financial conditions and monetary policy shocks affect the economy. Both types of shocks have a big impact on the real economy, but they last for different lengths of time. When the Federal Reserve adjusts interest rates in response to a financial shock, it helps the economy get back on track. However, if interest rates hit zero, this strategy may not work, leading to lower output and investment. By looking at the U.S. economy over the past two decades, the researchers break down how economic changes are influenced by financial, monetary policy, and other shocks.