Harmon, Derek (2020) The hidden cost of transparency pledges. LSE Business Review (18 Dec 2020). Blog Entry.
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Abstract
Leaders often make pledges of transparency to signal honesty and instil confidence. But what if they instead are sowing seeds of doubt? In a recent paper examining Federal Reserve communications, that’s exactly what I found. The study analyses seventeen years of speeches by the Fed chair, and looks at the effect these speeches have on the VIX Volatility Index, or “fear gauge.” What I show is that the more the chair tried to calm the market by being transparent about their objectives and policy framework, the more volatile the market became.
Item Type: | Online resource (Blog Entry) |
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Official URL: | https://blogs.lse.ac.uk/businessreview/ |
Additional Information: | © 2020 The Author |
Divisions: | LSE |
Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management |
Date Deposited: | 26 Jan 2021 10:36 |
Last Modified: | 14 Sep 2024 02:42 |
URI: | http://eprints.lse.ac.uk/id/eprint/108260 |
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