Arbeitspapier
Towards a consumer sentiment channel of monetary policy
We investigate the role of consumer confidence in the transmission of monetary policy shocks from an empirical and theoretical perspective. Standard VAR based analysis suggests that an empirical measure of consumer confidence drops significantly after a monetary tightening and amplifies the impact of monetary policy on aggregate consumption. Using a behavioral DSGE model, we show that a consumer sentiment channel can account for the empirical findings. In an environment of heterogeneous expectations, which gives rise to the notion of consumer sentiment, innovations to the Federal Funds rate impact on consumer confidence and thereby the broader economy.
- Language
-
Englisch
- Bibliographic citation
-
Series: W.E.P. - Würzburg Economic Papers ; No. 91
- Classification
-
Wirtschaft
Business Fluctuations; Cycles
Monetary Policy
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- Subject
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monetary policy
monetary transmission
consumer sentiment
- Event
-
Geistige Schöpfung
- (who)
-
Debes, Sebastian
Gareis, Johannes
Mayer, Eric
Rüth, Sebastian
- Event
-
Veröffentlichung
- (who)
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University of Würzburg, Department of Economics
- (where)
-
Würzburg
- (when)
-
2014
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Debes, Sebastian
- Gareis, Johannes
- Mayer, Eric
- Rüth, Sebastian
- University of Würzburg, Department of Economics
Time of origin
- 2014
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