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The long-run information effect of central bank communication

Abstract:

Why do long-run interest rates respond to central bank communication? Whereas existing explanations imply a common set of signals drives short and long-run yields, we show that news on economic uncertainty can have increasingly large effects along the yield curve. To evaluate this channel, we use the publication of the Bank of England’s Inflation Report, from which we measure a set of high-dimensional signals. The signals that drive long-run interest rates do not affect short-run rates and op...

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Publication status:
Published
Peer review status:
Peer reviewed

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Publisher copy:
10.1016/j.jmoneco.2019.09.002

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Institution:
University of Oxford
Division:
SSD
Department:
Economics
Oxford college:
St Hugh's College
Role:
Author
Publisher:
Elsevier Publisher's website
Journal:
Journal of Monetary Economics Journal website
Volume:
108
Pages:
185-202
Publication date:
2019-09-04
Acceptance date:
2019-09-04
DOI:
ISSN:
0304-3932
Language:
English
Keywords:
Pubs id:
pubs:973724
UUID:
uuid:4077dbff-e306-43b4-b4f5-071f024b10cf
Local pid:
pubs:973724
Source identifiers:
973724
Deposit date:
2019-09-10

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