In this session, we discuss how to measure the effects of monetary policy in the economy. The first task is to be able to measure monetary policy shocks, that is, exogenous changes in the policy rate. We discuss estimates of monetary policy shocks in the literature, including issues related with the use of quantitative easing as a policy instrument. The second step is the computation of dynamic effects on output and prices, and we show how to compute these effects using a local projection approach.
