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Do Markets Care Who Chairs the Central Bank?

Kenneth Kuttner () and Adam Posen ()

No 13101, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper assesses the effects of central bank governor appointments on financial market expectations of monetary policy. To measure these effects, we assemble a new dataset of appointment announcements from 15 countries, and conduct an event study analysis on exchange rates, bond yields, and stock prices. The analysis reveals a significant reaction of exchange rates and bond yields to unexpected appointments. The reactions are not unidirectional, and thus do not suggest new governors suffer from a generic credibility problem. Federal Reserve chairman appointments stand out in terms of their unusually pronounced effects on financial markets.

JEL-codes: E58 E61 G14 (search for similar items in EconPapers)
Date: 2007-05
Note: ME
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Published as Kenneth N. Kuttner & Adam S. Posen, 2010. "Do Markets Care Who Chairs the Central Bank?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(2-3), pages 347-371, 03.

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Related works:
Journal Article: Do Markets Care Who Chairs the Central Bank? (2010) Downloads
Working Paper: Do Markets Care Who Chairs the Central Bank? (2007) Downloads
Working Paper: Do Markets Care Who Chairs the Central Bank? (2007) Downloads
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