Franco, FrancescoBarrela, Rodrigo Duarte2019-04-122019-04-122019-01-14http://hdl.handle.net/10362/66380The present paper analyzes the differences between shocks to the monetary policy and the consumer interest rates in a context without perfect information where the agents observe only a noisy signal on their interest rate, thus resorting to a signal extraction problem before making their consumption decisions. The results show that non-monetary policy rate shocks – here designated as transmission mechanism shocks – are more important in determining economic fluctuations vis-à-vis monetary policy shocks. Noise is not impactful, thus not very important in determining consumers’s decisions. The results call for policymakers’ special attention when designing macroprudential policies that affect the transmission mechanism of interest ratesengMonetary policyNoiseSignal extractionTransmission mechanismmaster thesis202209121