Do people understand monetary policy?
Carlos Carvalho and
Fernanda Nechio
Journal of Monetary Economics, 2014, vol. 66, issue C, 108-123
Abstract:
We combine questions from the Michigan Survey about future inflation, unemployment, and interest rates to investigate whether households are aware of the basic features of U.S. monetary policy. Our findings provide evidence that some households form their expectations in a way that is consistent with a Taylor (1993)-type rule. We also document a large degree of variation in the pattern of responses over the business cycle. In particular, the negative relationship between unemployment and interest rates that is apparent in the data only shows up in households׳ answers during periods of labor market weakness.
Keywords: Survey data; Monetary policy; Communication; Taylor rule; Inflation expectations; Michigan Survey; Survey of Professional Forecasters (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (146)
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304393214000713
Full text for ScienceDirect subscribers only
Related works:
Working Paper: Do People Understand Monetary Policy? (2013) 
Working Paper: Do people undestand monetary policy? (2012) 
Working Paper: Do People Understand Monetary Policy? (2012) 
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:moneco:v:66:y:2014:i:c:p:108-123
DOI: 10.1016/j.jmoneco.2014.04.013
Access Statistics for this article
Journal of Monetary Economics is currently edited by R. G. King and C. I. Plosser
More articles in Journal of Monetary Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().