Lunch-Seminar CIREQ-McGill 2022-2023
joint with the Department of Economics, McGill University
Leacock 429 (McGill University, 855 Sherbrooke West)
Résumé : 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.