Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297291 
Year of Publication: 
2023
Series/Report no.: 
ECB Working Paper No. 2851
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We propose a novel identification design to estimate the causal effects of systematic monetary policy on the propagation of macroeconomic shocks. The design combines (i) a time-varying measure of systematic monetary policy based on the historical composition of hawks and doves in the Federal Open Market Committee (FOMC) with (ii) an instrument that leverages the mechanical FOMC rotation of voting rights. We apply our design to study the effects of government spending shocks. We find fiscal multipliers between two and three when the FOMC is dovish and below zero when it is hawkish. Narrative evidence from historical FOMC records corroborates our findings.
Subjects: 
monetary policy
FOMC
rotation
government spending
JEL: 
E32
E52
E62
E63
H56
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6216-2
Document Type: 
Working Paper

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