We introduce a novel method for estimating a monetary policy rule using macroeconomic news. Market forecasts of both economic conditions and monetary policy are affected by news, and our estimation links the two effects. This enables us to estimate directly the policy rule agents use to form...

Presented in London, U.K. Addressed members of various financial institutions on Wednesday at the UBS Macro Dinner in London.

Permanent increases in the monetary base foreshadow eventual increases in inflation that can increase, rather than reduce, unemployment.