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Informal central bank communication: The role of investor memories

Author

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  • Caiazza, Stefano
  • Fiordelisi, Franco
  • Galloppo, Giuseppe
  • Ricci, Ornella

Abstract

Central bank informal communication became more frequent and acquired more mass media attention after the global financial crisis. Do investors remember past central bank communications when a new communication is released? Focusing on the United States, we show that abnormal stock returns increase as informal communications are repeated over time and within a short distance from each other.

Suggested Citation

  • Caiazza, Stefano & Fiordelisi, Franco & Galloppo, Giuseppe & Ricci, Ornella, 2022. "Informal central bank communication: The role of investor memories," Economics Letters, Elsevier, vol. 217(C).
    • Handle: RePEc:eee:ecolet:v:217:y:2022:i:c:s0165176522002002
    DOI: 10.1016/j.econlet.2022.110632
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    References listed on IDEAS

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    1. Ben S. Bernanke & Kenneth N. Kuttner, 2005. "What Explains the Stock Market's Reaction to Federal Reserve Policy?," Journal of Finance, American Finance Association, vol. 60(3), pages 1221-1257, June.
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    4. Altavilla, Carlo & Brugnolini, Luca & Gürkaynak, Refet S. & Motto, Roberto & Ragusa, Giuseppe, 2019. "Measuring euro area monetary policy," Journal of Monetary Economics, Elsevier, vol. 108(C), pages 162-179.
    5. Fiordelisi, Franco & Renneboog, Luc & Ricci, Ornella & Lopes, Saverio Stentella, 2019. "Creative corporate culture and innovation," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 63(C).
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    Cited by:

    1. Marques-Ibanez, David & Santilli, Gianluca & Scardozzi, Giulia, 2024. "Bail-in in action," Economics Letters, Elsevier, vol. 241(C).

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    More about this item

    Keywords

    Monetary policy; Central bank communication;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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