The Making of Hawks and Doves: Inflation Experiences on the FOMC / Ulrike Malmendier, Stefan Nagel, Zhen Yan.

Format:

Book

Author/Creator:

Malmendier, Ulrike.

Contributor:

National Bureau of Economic Research.

Nagel, Stefan.

Yan, Zhen.

Series:

Working Paper Series (National Bureau of Economic Research) no. w23228.

NBER working paper series no. w23228

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Making of Hawks and Doves

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2017.

Summary:

We show that personal experiences of inflation strongly influence the hawkish or dovish leanings of central bankers. For all members of the Federal Open Market Committee (FOMC) since 1951, we estimate an adaptive learning rule based on their lifetime inflation data. The resulting experience-based forecasts have significant predictive power for members' FOMC voting decisions, the hawkishness of the tone of their speeches, as well as the heterogeneity in their semi-annual inflation projections. Averaging over all FOMC members present at a meeting, inflation experiences also help to explain the federal funds target rate, over and above conventional Taylor rule components.

Notes:

Print version record

March 2017.