EconPapers    
Economics at your fingertips  
 

The Voice of Monetary Policy

Yuriy Gorodnichenko, Tho Pham and Oleksandr Talavera ()

American Economic Review, 2023, vol. 113, issue 2, 548-84

Abstract: We develop a deep learning model to detect emotions embedded in press conferences after the Federal Open Market Committee meetings and examine the influence of the detected emotions on financial markets. We find that, after controlling for the Federal Reserve's actions and the sentiment in policy texts, a positive tone in the voices of Federal Reserve chairs leads to significant increases in share prices. Other financial variables also respond to vocal cues from the chairs. Hence, how policy messages are communicated can move the financial market. Our results provide implications for improving the effectiveness of central bank communications.

JEL-codes: D83 E31 E44 E52 E58 F31 G14 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/aer.20220129 (application/pdf)
https://doi.org/10.3886/E178302V1 (text/html)
https://www.aeaweb.org/doi/10.1257/aer.20220129.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/aer.20220129.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: The Voice of Monetary Policy (2021) Downloads
Working Paper: The Voice of Monetary Policy (2021) Downloads
Working Paper: The Voice of Monetary Policy (2021) Downloads
Working Paper: The Voice of Monetary Policy (2021) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:113:y:2023:i:2:p:548-84

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/aer.20220129

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

 
Page updated 2024-10-09
Handle: RePEc:aea:aecrev:v:113:y:2023:i:2:p:548-84