TY - JOUR

T1 - Central bank announcements

T2 - Big news for little people?

AU - Lamla, Michael J.

AU - Vinogradov, Dmitri V.

PY - 2019/12

Y1 - 2019/12

N2 - Little is known on how and whether central bank announcements affect consumers’ beliefs about policy-relevant economic figures. This paper focuses on consumers’ perceptions and expectations of inflation and interest rates and confidence therein. Based on a sound identification (running surveys shortly before and after communication events), and relying on above 15,000 observations, spanning over 12 FOMC press conferences between December 2015 and June 2018, we document the impact of the central bank communication on the general public. While announcement events have no measurable direct effect on average beliefs, they make people more likely to receive news about the central bank's policy. In general, informed consumers tend to have lower perceptions and expectations, higher confidence and, at least for perceived inflation, smaller errors.

AB - Little is known on how and whether central bank announcements affect consumers’ beliefs about policy-relevant economic figures. This paper focuses on consumers’ perceptions and expectations of inflation and interest rates and confidence therein. Based on a sound identification (running surveys shortly before and after communication events), and relying on above 15,000 observations, spanning over 12 FOMC press conferences between December 2015 and June 2018, we document the impact of the central bank communication on the general public. While announcement events have no measurable direct effect on average beliefs, they make people more likely to receive news about the central bank's policy. In general, informed consumers tend to have lower perceptions and expectations, higher confidence and, at least for perceived inflation, smaller errors.

KW - Economics

KW - Central bank communication

KW - Consumers

KW - Expectations

KW - Perceptions

UR - http://www.scopus.com/inward/record.url?scp=85071984658&partnerID=8YFLogxK

UR - https://www.mendeley.com/catalogue/0a58bb96-7614-3507-bb59-d595b1246105/

U2 - 10.1016/j.jmoneco.2019.08.014

DO - 10.1016/j.jmoneco.2019.08.014

M3 - Journal articles

AN - SCOPUS:85071984658

VL - 108

SP - 21

EP - 38

JO - Journal of Monetary Economics

JF - Journal of Monetary Economics

SN - 0304-3932

ER -