Pham, Tho (2023) The Voice of Monetary Policy. American Economic Review. pp. 548-584. ISSN 0002-8282
Abstract
We develop a deep learning model to detect emotions embedded in press conferences after the Federal Open Market Committee meetings and examine the influence of the detected emotions on financial markets. We find that, after controlling for the Fed’s actions and the sentiment in policy texts, a positive tone in the voices of Fed chairs leads to significant increases in share prices. Other financial variables also respond to vocal cues from the chairs. Hence, how policy messages are communicated can move the financial market. Our results provide implications for improving the effectiveness of central bank communications.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy. Further copying may not be permitted; contact the publisher for details |
Dates: |
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Institution: | The University of York |
Academic Units: | The University of York > Faculty of Social Sciences (York) > Economics and Related Studies (York) |
Depositing User: | Pure (York) |
Date Deposited: | 06 Jan 2023 13:30 |
Last Modified: | 19 Mar 2025 00:11 |
Published Version: | https://doi.org/10.1257/aer.20220129 |
Status: | Published |
Refereed: | Yes |
Identification Number: | 10.1257/aer.20220129 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:194977 |