Does a Bias in FOMC Policy Directives Help Predict Intermeeting Policy Changes?
Since 1984 the FOMC has issued directives indicating a bias toward easing or tightening. This paper investigates the information content of these asymmetric directives for the likelihood of inter-meeting changes in policy during the Greenspan chairmanship. If policy is measured by the change in the average daily federal funds rate after a directive is issued, the results indicate that a bias predicts a significant change in the average funds rate. If policy is measured qualitatively by whether the target for the federal funds rate changed, a bias significantly affects the probability that the target will be changed.
Year of publication: |
2000
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Authors: | Lapp, John S ; Pearce, Douglas K |
Published in: |
Journal of Money, Credit and Banking. - Blackwell Publishing. - Vol. 32.2000, 3, p. 435-41
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Publisher: |
Blackwell Publishing |
Saved in:
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