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First impressions matter: Signalling as a source of policy dynamics

Abstract:

We provide the first direct empirical support for the importance of signalling in monetary policy by testing two key predictions from a novel structural model. First, all policymaker types should become less tough on inflation over time and secondly, types that weigh output more should have a more pronounced shift. Voting data from the Bank of England's Monetary Policy Committee strongly support both predictions. Counterfactual results indicate signalling has a substantial impact on interest ...

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Publication status:
Published
Peer review status:
Peer reviewed

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Publisher copy:
10.1093/restud/rdw007

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Institution:
University of Oxford
Division:
Social Sciences Division
Department:
Economics
Oxford college:
St Hughs College
Role:
Author
Publisher:
Oxford University Press Publisher's website
Journal:
Review of Economic Studies Journal website
Volume:
83
Issue:
4
Pages:
1645–1672
Publication date:
2016-02-15
Acceptance date:
2015-09-01
DOI:
EISSN:
1467-937X
ISSN:
0034-6527
Pubs id:
pubs:926999
URN:
uri:e6686603-a49e-4d94-8c1a-86766c177ba8
UUID:
uuid:e6686603-a49e-4d94-8c1a-86766c177ba8
Local pid:
pubs:926999

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