First Impressions Matter: Signalling as a Source of Policy Dynamics

• 成果类型: Article
• 署名作者: Hansen, Stephen; Mcmahon, Michael
• 署名单位: Pompeu Fabra University; Barcelona School of Economics; University of Warwick
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdw007
• 发表日期: 2016
• 页码: 1645-1672
• 关键词: monetary-policy; reputation; inflation; credibility; MODEL; TRANSPARENCY; committees; DISCRETION; INFORMATION; rules

摘要

We provide the first direct empirical support for the importance of signalling in monetary policy by testing two key predictions from a novel structural model. First, all policymaker types should become less tough on inflation over time and secondly, types that weigh output more should have a more pronounced shift. Voting data from the Bank of England's Monetary Policy Committee strongly support both predictions. Counterfactual results indicate signalling has a substantial impact on interest rates over the business cycle, and improves the committee designer's welfare. Implications for committee design include allowing regular member turnover and transparency regarding publishing individual votes.