Replication data for: Forward Guidance and Heterogeneous Beliefs
- Andrade, Philippe
- Gaballo, Gaetano
- Mengus, Eric
- Mojon, Benoît
AbstractCentral banks' announcements that rates are expected to remain low could signal either a weak macroeconomic outlook, which would slow expenditures, or a more accommodative stance, which may stimulate economic activity. We use the Survey of Professional Forecasters to show that, when the Fed gave guidance between 2011:III and 2012:IV, these two interpretations coexisted despite a consensus on low expected rates. We rationalize these facts in a New-Keynesian model where heterogeneous beliefs introduce a trade-off in forward guidance policy: leveraging on the optimism of those who believe in monetary easing comes at the cost of inducing excess pessimism in non-believers.
Is supplement to
DOI: 10.1257/mac.20180141 (Text)
Andrade, Philippe, Gaetano Gaballo, Eric Mengus, and Benoît Mojon. “Forward Guidance and Heterogeneous Beliefs.” American Economic Journal: Macroeconomics 11, no. 3 (July 2019): 1–29. https://doi.org/10.1257/mac.20180141.
- ID: 10.1257/mac.20180141 (DOI)
Update Metadata: 2020-05-18 | Issue Number: 2 | Registration Date: 2019-12-07