Has the Information Channel of Monetary Policy Disappeared? Revisiting the Empirical Evidence
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Date
2020-04-30
Journal Title
Journal ISSN
Volume Title
Publisher
Private Enterprise Research Center, Texas A&M University
Abstract
Does the Federal Reserve have an “information advantage� in forecasting macroeconomic variables beyond what is known to private sector forecasters? And are market participants reacting only to monetary policy shocks or also to future information on the state of the economy that the Federal Reserve communicates in its announcements via an“information channel?� This issue of PERCspectives on Research discusses the paper by PERC Professor Tatevik Sekhposyan, Lucas Hoesch, and Barbara Rossi, which investigates the evolution of the information channel over time. Although the information channel appears to be important historically, we find no empirical evidenceof its presence in the recent years once instabilities are accounted for.
Description
HealthCare
Keywords
Forecasting, Monetary Policy, Instabilities, Time Variation, Survey Forecasts, Information Channel of Monetary Policy, HealthCare