No disponible en español
Laura Gáti
Research
- Division
Monetary Policy Research
- Current Position
-
Senior Economist
- Fields of interest
-
Macroeconomics and Monetary Economics
- Education
- 2015-2021
PhD, Boston College
- 19 December 2022
- WORKING PAPER SERIES - No. 2759Details
- Abstract
- Does the Federal Reserve follow a communication rule? We propose a simple framework to estimate communication rules, which we conceptualize as a systematic mapping between the Fed’s expectations of macroeconomic variables and the words they use to talk about the economy. Using text analysis and regularized regressions, we find strong evidence for systematic communication rules that vary over time, with changes in the rule often being associated with changes in the economic environment. We also find that shifts in communication rules increase disagreement among professional forecasters and correlate with monetary policy surprise measures. Our method is general and can be applied to investigate systematic communication in a wide variety of settings.
- JEL Code
- E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
C49 : Mathematical and Quantitative Methods→Econometric and Statistical Methods: Special Topics→Other
- 25 July 2022
- WORKING PAPER SERIES - No. 2685Details
- Abstract
- This paper analyzes monetary policy in a model with a potential unanchoring of inflation expectations. The degree of unanchoring is given by how sensitively the public’s long-run inflation expectations respond to inflation surprises. I find that optimal policy moves the interest rate aggressively when expectations unanchor, allowing the central bank to accommodate inflation fluctuations when expectations are well-anchored. Furthermore, I estimate the model-implied relationship that determines the extent of unanchoring. The data suggest that the expectations process is nonlinear and asymmetric: expectations respond more sensitively to large or downside surprises than to smaller or upside ones.
- JEL Code
- E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E71 : Macroeconomics and Monetary Economics
D84 : Microeconomics→Information, Knowledge, and Uncertainty→Expectations, Speculations
- 2022
- Journal of Money, Credit and Banking