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A textual Taylor rule: estimating central bank preferences combining topic and scaling methods

Published online by Cambridge University Press:  18 September 2018

Nicole Baerg*
Affiliation:
Department of Government, University of Essex, Colchester CO4 3SQ, UK
Will Lowe
Affiliation:
Department of Politics, Princeton University, Princeton, NJ 08540, USA
*
*Corresponding author. Email: nicole.baerg@essex.ac.uk

Abstract

Scholars often use voting data to estimate central bankers’ policy preferences but consensus voting is commonplace. To get around this, we combine topic-based text analysis and scaling methods to generate theoretically motivated comparative measures of central bank preferences on the US Federal Open Market Committee (FOMC) leading up to the financial crisis in a way that does not depend on voting behavior. We apply these measures to a number of applications in the literature. For example, we find that FOMC members that are Federal Reserve Bank Presidents from districts experiencing higher unemployment are also more likely to emphasize unemployment in their speech. We also confirm that committee members on schedule to vote are more likely to express consensus opinion than their off schedule voting counterparts.

Type
Original Articles
Copyright
Copyright © The European Political Science Association 2018 

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Footnotes

*

An earlier version of this project was developed for NLP Unshared Task in PoliInformatics 2014.

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Supplementary material: PDF

Baerg and Lowe supplementary material

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Baerg and Lowe Dataset

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