Estimating Central Bank Preferences Combining Topic and Scaling Methods

Nicole Baerg and Will Lowe

MPRA Paper from University Library of Munich, Germany

Abstract: Scholars often use Federal Open Market Committee (FOMC) votes to estimate the preferences of central bankers. However, rarely do committee members on the FOMC cast dissenting votes. This article demonstrates the usefulness of using what central bankers say in FOMC meetings rather than how they vote to better measure central bank preferences. Using automated text analysis tools and scaling methods, we develop a new measure of central bank preferences on the FOMC leading up to the financial crisis (2005 - 2008).

Keywords: Central Banking; Federal Reserve Bank; Monetary Policy; Ideal Point Estimation; Textual Analysis (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Date: 2015-01-22
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:61534

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