BIROn - Birkbeck Institutional Research Online

    Central Bank optimism as a policy tool: evidence from the Bank of England

    Adesina, T. (2017) Central Bank optimism as a policy tool: evidence from the Bank of England. Working Paper. Birkbeck, University of London, London, UK.

    [img]
    Preview
    Text
    26859.pdf - Draft Version

    Download (509kB) | Preview

    Abstract

    We evaluate the tone of optimism in the Bank of England’s Monetary Policy Committee (MPC) communication using computerised textual analysis and then explore the impacts of optimism shocks on key macroeconomic variables. We show that innovations in optimism impact key macroeconomic variables in the same way that a contractionary monetary policy would. We find that increasing optimism shocks in MPC communication leads to rising inflation, falling output, declining stock market returns and a rise in the Pound value. We further find evidence that optimism shocks reduce credit availability, the money supply, retail sales as well as earnings. Finally, government bond yields also tend to rise in response to optimism shocks.

    Metadata

    Item Type: Monograph (Working Paper)
    Additional Information: BWPEF 1708
    Keyword(s) / Subject(s): central bank communication, monetary policy, optimism
    School: Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
    Depositing User: Administrator
    Date Deposited: 25 Mar 2019 13:35
    Last Modified: 02 Aug 2023 17:49
    URI: https://eprints.bbk.ac.uk/id/eprint/26859

    Statistics

    Activity Overview
    6 month trend
    113Downloads
    6 month trend
    409Hits

    Additional statistics are available via IRStats2.

    Archive Staff Only (login required)

    Edit/View Item Edit/View Item