  We study the effects of financial shocks on the United States economy by
using a Bayesian structural vector autoregressive (SVAR) model that exploits
the non-normalities in the data. We use this method to uniquely identify the
model and employ inequality constraints to single out financial shocks. The
results point to the existence of two distinct financial shocks that have
opposing effects on inflation, which supports the idea that financial shocks
are transmitted to the real economy through both demand and supply side
channels.
