Curtin University Homepage
  • Library
  • Help
    • Admin

    espace - Curtin’s institutional repository

    JavaScript is disabled for your browser. Some features of this site may not work without it.
    View Item 
    • espace Home
    • espace
    • Curtin Research Publications
    • View Item
    • espace Home
    • espace
    • Curtin Research Publications
    • View Item

    Does more complex language in FOMC decisions impact financial markets?

    Access Status
    Fulltext not available
    Authors
    Smales, Lee
    Apergis, N.
    Date
    2017
    Type
    Journal Article
    
    Metadata
    Show full item record
    Citation
    Smales, L. and Apergis, N. 2017. Does more complex language in FOMC decisions impact financial markets? Journal of International Financial Markets, Institutions and Money. 51: pp. 171-189.
    Source Title
    Journal of International Financial Markets, Institutions and Money
    DOI
    10.1016/j.intfin.2017.08.003
    ISSN
    1042-4431
    School
    Curtin Graduate School of Business
    URI
    http://hdl.handle.net/20.500.11937/57827
    Collection
    • Curtin Research Publications
    Abstract

    © 2017 Elsevier B.V. This paper is built around a simple premise that is based on the theoretical models of Harris and Raviv (1993) and Kandel and Pearson (1995). Complex statements are more difficult to interpret and may be construed in different ways by different agents. This creates heterogeneity of beliefs among market participants that manifests in increased market activity. We introduce novel measures of linguistic complexity (readability and word count) for the FOMC statements that accompany monetary policy decisions. The empirical evidence shows that monetary policy surprises have a significant impact on financial markets, and clearly demonstrates that more complex language significantly increases the trading volume, and volatility of returns, in stock, bond, and currency markets. We also establish that financial markets are more responsive to monetary policy decisions (and the language of those statements) during recession.

    Related items

    Showing items related by title, author, creator and subject.

    • Analysis of urban farmers’ markets as a tourism product in Malaysia
      Saili, Abdul Rahman (2011)
      Farmers‟ markets are an exciting and important form of free enterprise. They have a strong potential to support sustainable development due to the myriad of economic and social benefits they could bring to a society. ...
    • Key Success and Failure Paths in Fashion Marketing Strategies
      Woodside, Arch (2010)
      Both successful and unsuccessful design+marketing projects in high fashion products and services represent creating and implementing recipes or paths of key success factors (KSFs). While implementing any one KSF is not ...
    • A study of agribusiness supply chain systems for small farmers in dryland areas of Lombok Island Indonesia : a pluralistic approach
      Tanaya, I Gusti Lanang Parta (2010)
      Despite the contribution that agriculture makes to the Indonesian Gross Domestic Product, the income of small subsistence farmers continues to fall. While many development activities and policies have been implemented to ...
    Advanced search

    Browse

    Communities & CollectionsIssue DateAuthorTitleSubjectDocument TypeThis CollectionIssue DateAuthorTitleSubjectDocument Type

    My Account

    Admin

    Statistics

    Most Popular ItemsStatistics by CountryMost Popular Authors

    Follow Curtin

    • 
    • 
    • 
    • 
    • 

    CRICOS Provider Code: 00301JABN: 99 143 842 569TEQSA: PRV12158

    Copyright | Disclaimer | Privacy statement | Accessibility

    Curtin would like to pay respect to the Aboriginal and Torres Strait Islander members of our community by acknowledging the traditional owners of the land on which the Perth campus is located, the Whadjuk people of the Nyungar Nation; and on our Kalgoorlie campus, the Wongutha people of the North-Eastern Goldfields.