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Do Federal Reserve presidents communicate with a regional bias?

Bernd Hayo () and Matthias Neuenkirch ()

Journal of Macroeconomics, 2013, vol. 35, issue C, 62-72

Abstract: In this paper, we analyze the determinants of US monetary policy stance as expressed in speeches by Federal Reserve (Fed) officials over the period January 1998–September 2009. Econometrically, we use a probit model with regional and national macroeconomic variables to explain the content of these speeches. Our results are, first, that a rise in the inflation rate or the Leading Index makes a hawkish speech more likely. Second, when Fed presidents make a speech in their home district, its content is influenced by both regional and national macroeconomic variables, whereas speeches given outside the home district are influenced solely by national information. Third, the influence of regional variables increases during (i) Ben Bernanke’s tenure as Fed Chairman, (ii) recessions, and (iii) the financial crisis. Finally, speeches by nonvoting presidents reflect regional economic development to a greater extent than those by voting presidents.

Keywords: Central bank communication; Disagreement; Federal Reserve; Monetary policy; Regional representation; Speeches (search for similar items in EconPapers)
JEL-codes: D72 E52 E58 (search for similar items in EconPapers)
Date: 2013
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Working Paper: Do Federal Reserve Presidents Communicate with a Regional Bias? (2011) Downloads
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