Strong anti-inflationary monetary policy helps mitigate uncertainty shocks, Italian paper says
Paper sees a Taylor rule as useful for mitigating uncertainty-driven recessions
Monetary policy can mitigate the adverse effects of uncertainty by adopting strong anti-inflationary policy, according to a working paper published by the Bank of Italy.
Elisa Guglielminetti analyses the effects of uncertainty on firms' hiring and investment decisions, both empirically and theoretically in The labor market channel of macroeconomic uncertainty.
In the theoretical part of her paper, Guglielminetti builds a DSGE model that can generate the observed co-movement of consumption
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