Template-Type: ReDIF-Paper 1.0
Title: Labor Market Effects of Monetary Policy Across Workers and Firms
Author-Name: Lukas Hack
Author-Email: lukas.hack@uni-mannheim.de
Author-Name: Klodiana Istrefi
Author-Email: klodiana.istrefi@banque-france.fr
Author-Name: Matthias Meier
Author-Email: m.meier@uni-mannheim.de
Classification-JEL: E32, E52, E62, E63, H56
Keywords: Systematic monetary policy, FOMC, rotation, government spending

Abstract: We propose a novel identification design to estimate the causal effects of systematic
monetary policy on the propagation of macroeconomic shocks. The design combines
(i) a time-varying measure of systematic monetary policy based on the historical
composition of hawks and doves in the Federal Open Market Committee (FOMC)
with (ii) an instrument that leverages the mechanical FOMC rotation of voting rights.
We apply our design to study the effects of government spending shocks. We find fiscal
multipliers between two and three when the FOMC is dovish and below zero when it
is hawkish. Narrative evidence from historical FOMC records corroborates our finndings.

Note: 
Length: 30
Creation-Date: 2023-03
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp408
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2023_408v2