FOMC policy preferences and economic policy uncertainty

Michael Ellis () and Dandan Liu

Economics Letters, 2021, vol. 205, issue C

Abstract: This paper studies the relationship between the individual monetary policy preferences of Federal Open Market Committee meeting participants and the private sector’s economic policy uncertainty. We find that an increase in economic policy uncertainty is associated with a preference for monetary policy easing, and this effect is in addition to any effect of policy uncertainty on inflation and output gap forecasts. We also show that the results are largely driven by presidents of Federal Reserve Banks, especially non-voting presidents of Federal Reserve Banks.

Keywords: Federal Open Market Committee; Economic policy uncertainty (search for similar items in EconPapers)
JEL-codes: E43 E52 E58 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:205:y:2021:i:c:s0165176521002147

DOI: 10.1016/j.econlet.2021.109937

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