The COVID-19 pandemicis influencing the management of monetarypolicy in its role as regulator of aggregate demand
and guarantor of macroeconomicstability. We use a Bayesian VAR framework (BVAR) to provide an analysis of the COVID-19
uncertainty shock on the economy and monetarypolicy response. This analysis shows important conclusions. The uncertainty
effect of COVID-19 hits unprecedented aggregate demand and the economy. In addition, it undermines monetary policy action
to soften this fall in aggregate demand and curb inflation impacted by the exchange rate effect. We suggest a development of
unconventional devices for a gradual recovery of the economy.
Real Time Impact Factor:
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Author Name: Christian P. Pinshi
URL: View PDF
Keywords: Uncertainty, COVID-19, Monetarypolicy, Bayesian VAR
ISSN: 2644-0490
EISSN: 2644-0504
EOI/DOI:
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