Estimating Central Bank Preferences Combining Topic and Scaling Methods

Baerg, Nicole Rae and Lowe, Will (2015): Estimating Central Bank Preferences Combining Topic and Scaling Methods.

Abstract

Scholars often use Federal Open Market Committee (FOMC) votes to estimate the preferences of central bankers. However, rarely do committee members on the FOMC cast dissenting votes. This article demonstrates the usefulness of using what central bankers say in FOMC meetings rather than how they vote to better measure central bank preferences. Using automated text analysis tools and scaling methods, we develop a new measure of central bank preferences on the FOMC leading up to the financial crisis (2005 - 2008).

• Item Type: MPRA Paper
• Language: English
• Keywords: Central Banking, Federal Reserve Bank, Monetary Policy, Ideal Point Estimation, Textual Analysis
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies

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