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- Title
TRANSPARENCY AND DELIBERATION WITHIN THE FOMC: A COMPUTATIONAL LINGUISTICS APPROACH.
- Authors
Hansen, Stephen; McMahon, Michael; Prat, Andrea
- Abstract
How does transparency, a key feature of central bank design, affect monetary policy makers' deliberations? Theory predicts a positive discipline effect and negative conformity effect. We empirically explore these effects using a natural experiment in the Federal Open Market Committee in 1993 and computational linguistics algorithms. We first find large changes in communication patterns after transparency. We then propose a difference-in-differences approach inspired by the career concerns literature, and find evidence for both effects. Finally, we construct an influence measure that suggests the discipline effect dominates.
- Subjects
UNITED States; UNITED States. Federal Open Market Committee; ORGANIZATIONAL transparency; DELIBERATION; MONETARY policy; COMPUTATIONAL linguistics
- Publication
Quarterly Journal of Economics, 2018, Vol 133, Issue 2, p801
- ISSN
0033-5533
- Publication type
Article
- DOI
10.1093/qje/qjx045