Miguel Acosta (Federal Reserve Board), "The Perceived Causes of Monetary Policy Surprises"


Leacock Building Room 429, 855 rue Sherbrooke Ouest, Montreal, QC, H3A 2T7, CA

"The Perceived Causes of Monetary Policy Surprises"

Miguel Acosta (Federal Reserve Board)
November 18, 2022, 3:30 to 5:00 PM
Leacock 429

Host: Francisco Ruge-Murcia
Field: Macro

I estimate the macroeconomic effects of two central aspects of Federal Reserve (Fed) communications—interest-rate forward guidance and macroeconomic information provision—using newly identified shocks to each aspect of policy. The shocks are based on a new measure of high-frequency GDP forecast revisions that I construct from the text of newspaper articles. I recover the shocks from a model of how Fed announcements determine interest-rate and GDP expectations, identified with a discrete change in Fed communication policy: the introduction of interest-rate forward guidance. The estimated effects of monetary policy and information provision are large, robust, and consistent with macroeconomic theory.

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