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Establishing a hawkish reputation: interest rate setting by newly appointed central bank governors

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  • Matthias Neuenkirch

Abstract

In this article, we explore the interest rate setting behaviour of newly appointed central bank governors. We estimate an augmented Taylor (1993) rule for 15 OECD countries and the period 1974 to 2008. We find that newly appointed governors fight inflation more aggressively during the first four to eight quarters of their tenure in an effort to establish a reputation for being inflation averse.

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  • Matthias Neuenkirch, 2015. "Establishing a hawkish reputation: interest rate setting by newly appointed central bank governors," Applied Economics Letters, Taylor & Francis Journals, vol. 22(5), pages 391-396, March.
    • Handle: RePEc:taf:apeclt:v:22:y:2015:i:5:p:391-396
    DOI: 10.1080/13504851.2014.946175
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    1. Stephen Hansen & Michael McMahon, 2016. "First Impressions Matter: Signalling as a Source of Policy Dynamics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 83(4), pages 1645-1672.
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    1. Bennani, Hamza & Kranz, Tobias & Neuenkirch, Matthias, 2018. "Disagreement between FOMC members and the Fed’s staff: New insights based on a counterfactual interest rate," Journal of Macroeconomics, Elsevier, vol. 58(C), pages 139-153.

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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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