Monetary policy rules and opinionated markets

Pengfei Jia, Haopeng Shen and Shikun Zheng

Economics Letters, 2023, vol. 223, issue C

Abstract: The Fed and the market often disagree about the path of interest rates. We measure this disagreement using gaps between the Greenbook and the Blue Chip forecasts for future three-month Treasury rates. We decompose this disagreement using the Blinder–Oaxaca decomposition. Our empirical results show that different perceptions about the Taylor rule can contribute substantially to the disagreement.

Keywords: Expectation formation; Monetary policy; The Taylor rule; Opinionated markets; The Blinder–Oaxaca decomposition (search for similar items in EconPapers)
JEL-codes: E47 E52 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176523000204
Full text for ScienceDirect subscribers only

Related works:
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:eee:ecolet:v:223:y:2023:i:c:s0165176523000204

DOI: 10.1016/j.econlet.2023.110995

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().