The Changing Probability of a Monetary Policy Response to Inflation and Employment Announcements
AbstractThis paper investigates the changing probability of a monetary policy response to inflation and employment announcements within the Federal Funds targeting procedure. It is found that employment announcements are significantly linked to Federal Reserve policy actions and the probability of no change in the funds target more than doubles in going from the March 1984-March 1991 period to the April 1994-January 2002 period. This change in policy behavior is also mirrored by the behavior of financial market participants; employment surprises help explain movements in the T-bill rate in the earlier period but not in the later period.
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Bibliographic InfoArticle provided by Eastern Economic Association in its journal Eastern Economic Journal.
Volume (Year): 29 (2003)
Issue (Month): 4 (Fall)
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More information through EDIRC
Employment; Fund; Inflation; Monetary Policy; Monetary; Policy;
Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
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