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Fireside Chats: Communication and Consumers’ Expectations in the Great Depression

Mathieu Pedemonte

No 202030, Working Papers from Federal Reserve Bank of Cleveland

Abstract: This paper shows how policy announcements can be used to manage expectations and have a role as a policy tool. Using regional variation in radio exposure, I evaluate the impact of President Franklin D. Roosevelt’s 1935 Fireside Chat, in which he showcased the introduction of important social policies, establishing a new cycle of the New Deal. I document that cities with higher exposure to the announcement exhibited a significant increase in spending on durable goods. I provide evidence that this result is not driven by wealth or other potentially confounding variables. The estimated effect is consistent with changes in expectations toward the policies announced. This paper shows the power of communication as a policy tool in affecting economic activity.

JEL-codes: E21 D84 N32 (search for similar items in EconPapers)
Pages: 77
Date: 2020-10-06
New Economics Papers: this item is included in nep-his and nep-mac
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DOI: 10.26509/frbc-wp-202030

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