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State-dependent effects of monetary policy: the central bank information channel

Paul Hubert

No 2019-04, Documents de Travail de l'OFCE from Observatoire Francais des Conjonctures Economiques (OFCE)

Abstract: When the central bank and private agents do not share the same information, private agents may not be able to appreciate whether monetary policy responds to changes in the macroeconomic outlook or to changes in policy preferences. In this context, this paper investigates whether the publication of the central bank macroeconomic information set modifies private agents’interpretation of policy decisions. We find that the sign and magnitude of the effects of monetary policy depend on the publication of policymakers’ macroeconomic views. Contractionary monetary policy has negative effects on inflation expectations and stock prices only if associated with inflationary news.

Keywords: Monetary policy; information processing; signal extraction; market based inflation expectations; central bank projections; real-time forecasts (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Date: 2019-02
New Economics Papers: this item is included in nep-mac
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Related works:
Working Paper: State-Dependent Effects of Monetary Policy: The Central Bank Information Channel (2019) Downloads
Working Paper: State-Dependent Effects of Monetary Policy: The Central Bank Information Channel (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:fce:doctra:1904

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