Arbeitspapier
Financial stability and the Fed: evidence from congressional hearings
This paper retraces how financial stability considerations interacted with U.S. monetary policy before and during the Great Recession. Using text-mining techniques, we construct indicators for financial stability sentiment expressed during testimonies of four Federal Reserve Chairs at Congressional hearings. Including these text-based measures adds explanatory power to Taylor-rule models. In particular, negative financial stability sentiment coincided with a more accommodative monetary policy stance than implied by standard Taylor-rule factors, even in the decades before the Great Recession. These findings are consistent with a preference for monetary policy reacting to financial instability rather than acting pre-emptively to a perceived build-up of risks.
- Language
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Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 7657
- Classification
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Wirtschaft
Monetary Policy
Central Banks and Their Policies
Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: U.S.; Canada: 1913-
- Subject
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monetary policy
financial stability
Taylor rule
text mining
- Event
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Geistige Schöpfung
- (who)
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Wischnewsky, Arina
Jansen, David-Jan
Neuenkirch, Matthias
- Event
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Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
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Munich
- (when)
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2019
- Handle
- Last update
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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
- Wischnewsky, Arina
- Jansen, David-Jan
- Neuenkirch, Matthias
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2019
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