Do Federal Reserve Presidents Communicate with a Regional Bias?

Bernd Hayo and Matthias Neuenkirch

No 201103, MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: In this paper, we analyze the determinants of U.S. monetary policy stance as expressed in speeches by Federal Reserve (Fed) officials over the period January 1998 to 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 Fed governors and presidents follow a Taylor rule when expressing their opinions: a rise in inflation 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)
Pages: 22 pages
Date: 2011
New Economics Papers: this item is included in nep-cba, nep-cis, nep-fmk and nep-mon
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Citations: View citations in EconPapers (3)

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Journal Article: Do Federal Reserve presidents communicate with a regional bias? (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:201103

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