Paper #1425

Título:

Transparency and deliberation within the FOMC: A computational linguistics approach

Autores:

Stephen Eliot Hansen, Michael McMahon y Andrea Prat

Fecha:

Mayo 2014

Resumen:

How does transparency, a key feature of central bank design, affect the deliberation of monetary policymakers? We exploit a natural experiment in the Federal Open Market Committee in 1993 together with computational linguistic models (particularly Latent Dirichlet Allocation) to measure the effect of increased transparency on debate. Commentators have hypothesized both a beneficial discipline effect and a detrimental conformity effect. A difference-in-differences approach inspired by the career concerns literature uncovers evidence for both effects. However, the net effect of increased transparency appears to be a more informative deliberation process.

Palabras clave:

Monetary policy, deliberation, FOMC, transparency, career concerns

Códigos JEL:

E52, E58, D78

Área de investigación:

Economía de la Empresa y Organización Industrial

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