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Monetary Policy Communications and their Effects on Household Inflation Expectations / Olivier Coibion, Yuriy Gorodnichenko, Michael Weber.
- Format:
- Book
- Author/Creator:
- Coibion, Olivier.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w25482.
- NBER working paper series no. w25482
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2019.
- Summary:
- We study how different forms of communication influence inflation expectations in a randomized controlled trial using nearly 20,000 U.S. individuals. We elicit individuals' inflation expectations in the Nielsen Homescan panel and then provide eight different forms of information regarding inflation. Reading the actual Federal Open Market Committee (FOMC) statement has about the same average effect on expectations as simply being told about the Federal Reserve's inflation target. Reading news articles about the most recent FOMC meetings results in a forecast revision which is smaller by half. This exogenous variation in inflation expectations has subsequent effects on household spending. Our results have implications for how central banks should communicate to the broader public.
- Notes:
- Print version record
- January 2019.
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