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International environment and US monetary policy: a textual analysis
[Environnement international et politique monétaire américaine : une analyse textuelle]

Author

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  • Laurent Ferrara
  • Charles-Emmanuel Teuf

Abstract

What role does the international environment play in shaping US monetary policy decisions? To measure its influence, we construct an international indicator extracted from minutes of Fed monetary policy committee meetings. In a Taylor rule model, we show that the indicator has a significant and negative impact on the fed funds rate. Discussions centred more on the international environment may thus be associated with greater monetary policy easing. Quel rôle joue l’environnement international dans les décisions de politique monétaire aux États-Unis ? Pour l’évaluer, nous construisons un indicateur international extrait des « minutes » des comités monétaires de la Fed. Cet indicateur a un effet significatif et négatif sur le taux d’intérêt de la Fed dans une règle de Taylor. Des discussions plus centrées sur l’environnement international seraient ainsi associées à davantage d’assouplissement de la politique monétaire.

Suggested Citation

  • Laurent Ferrara & Charles-Emmanuel Teuf, 2018. "International environment and US monetary policy: a textual analysis [Environnement international et politique monétaire américaine : une analyse textuelle]," Eco Notepad (in progress) 86, Banque de France.
    • Handle: RePEc:bfr:econot:86
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    File URL: https://www.banque-france.fr/en/publications-and-statistics/publications/international-environment-and-us-monetary-policy-textual
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    File URL: https://www.banque-france.fr/fr/publications-et-statistiques/publications/environnement-international-et-politique-monetaire
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