First Impressions Matter: Signalling as a Source of Policy Dynamics
AbstractWe first establish that policymakers on the Bank of England’s Monetary Policy Committee choose lower interest rates with experience. We then reject increasing confidence in private information or learning about the structure of the macroeconomy as explanations for this shift. Instead, a model in which voters signal their hawkishness to observers better fits the data. The motivation for signalling is consistent with wanting to control inflation expectations, but not career concerns or pleasing colleagues. There is also no evidence of capture by industry. The paper suggests that policy-motivated reputation building may be important for explaining dynamics in experts’ policy choices
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3782.
Date of creation: 2012
Date of revision:
signalling; learning; monetary policy;
Other versions of this item:
- Stephen Hansen & Michael McMahon, 2011. "First Impressions Matter: Signalling as a Source of Policy Dynamics," CEP Discussion Papers dp1074, Centre for Economic Performance, LSE.
- Stephen Eliot Hansen & Michael McMahon, 2011. "First impressions matter: Signalling as a source of policy dynamics," Economics Working Papers 1279, Department of Economics and Business, Universitat Pompeu Fabra.
- Stephen Hansen & Michael McMahon, 2011. "First Impressions Matter: Signalling as a Source of Policy Dynamics," Working Papers 572, Barcelona Graduate School of Economics.
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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