TY - UNPB
T1 - Do firm expectations respond to Monetary Policy announcements?
AU - Pace, Federico Di
AU - Mangiante, Giacomo
AU - Masolo, Riccardo Maria
PY - 2023
Y1 - 2023
N2 - We study whether firms' expectations react to the Bank of England's monetary policy announcements by comparing the responses to the Decision Maker Panel (DMP) survey filed immediately before and after a Monetary Policy Committee (MPC) meeting. On the one hand, we find that firms' expectations and uncertainty about their own business for the most part do not respond to high-frequency monetary policy surprises. On the other hand, announced changes in the monetary policy rate induce firms to revise their price expectations, with rate hikes resulting in a reduction in price expectations and the uncertainty surrounding them.
AB - We study whether firms' expectations react to the Bank of England's monetary policy announcements by comparing the responses to the Decision Maker Panel (DMP) survey filed immediately before and after a Monetary Policy Committee (MPC) meeting. On the one hand, we find that firms' expectations and uncertainty about their own business for the most part do not respond to high-frequency monetary policy surprises. On the other hand, announced changes in the monetary policy rate induce firms to revise their price expectations, with rate hikes resulting in a reduction in price expectations and the uncertainty surrounding them.
KW - Central bank communication, firm expectations, high-frequency identification, survey data.
KW - Central bank communication, firm expectations, high-frequency identification, survey data.
UR - http://hdl.handle.net/10807/263634
UR - https://dipartimenti.unicatt.it/economia-finanza-def127.pdf
M3 - Working paper
SN - ISSN 2704-7407
BT - Do firm expectations respond to Monetary Policy announcements?
ER -