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Central Bank Announcements: Big News for Little People?

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  • Lamla, Michael J
  • Vinogradov, Dmitri V

Abstract

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 ordinary people. While announcement events have little 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, to an extent, better quality beliefs.

Suggested Citation

  • Lamla, Michael J & Vinogradov, Dmitri V, 2019. "Central Bank Announcements: Big News for Little People?," Essex Finance Centre Working Papers 25125, University of Essex, Essex Business School.
  • Handle: RePEc:esy:uefcwp:25125
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    More about this item

    Keywords

    perceptions; expectations; central bank communication; consumers.;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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