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Hedging Discourse: Implications of Federal Reserve Policy Rhetoric

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dc.contributor.advisor Fernald, Theodore B.
dc.contributor.advisor McDonogh, Gary W. Tjing, Leslie 2015-09-24T18:52:45Z 2015-09-24T18:52:45Z 2015
dc.description.abstract Language, as a strategic policy-planning tool, can be meticulously controlled to frame policy decisions and condition policy interpretation. This thesis analyzes Federal Reserve policy rhetoric to understand how the Federal Open Market Committee (FOMC), the Fed’s policymaking body, uses language to communicate its monetary policy decisions through verbal and written discourse. With the interest of examining rhetorical changes in response to financial crises, I analyze excerpts from selected FOMC meeting transcripts and minutes from 2004–2006 (post2001 crisis) and 2011–2013 (post2008 crisis). In recognition of economic uncertainty, economists generally speak with cautious rhetoric and “hedge” when making economic forecasts. I use the term hedging to refer to a linguistic strategy used by the speaker to mitigate commitment to and about a proposition. The presence of hedged statements in economics discourse is generally explicit, if not intentional. I identify the role of hedging in light of recent crises, which have prompted the Fed to provide the markets with greater clarity regarding policy measures and expectations. In the pursuit of improving communication transparency, the Fed has increasingly considered language as a key decision-making tool in its policymaking process. My thesis highlights a particular example—the Fed’s “forward-guidance” language—which was adopted by Alan Greenspan and Ben Bernanke in response to the 2001 and 2008 U.S economic crises, respectively, as a necessary conduit for communicating the path of accommodative monetary policy measures. I analyze FOMC rhetoric in a post-crisis context, as the height of economic uncertainty during this period of time typically warrants frequent use of epistemic hedging. In general, this thesis demonstrates the critical function hedges serve: they are linguistically necessary for framing “forward-guidance” language as they assist in making the implicit conditionality in both spoken and written language more explicit.
dc.description.sponsorship Bryn Mawr College. Department of Growth and Structure of Cities
dc.description.sponsorship Tri-College (Bryn Mawr, Haverford, and Swarthmore Colleges). Department of Linguistics
dc.language.iso eng
dc.subject.lcsh United States. Federal Open Market Committee -- Planning
dc.subject.lcsh Monetary policy -- United States
dc.subject.lcsh Rhetoric
dc.subject.lcsh Federal Reserve banks
dc.title Hedging Discourse: Implications of Federal Reserve Policy Rhetoric
dc.type Thesis
dc.rights.access Tri-College users only

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