Miguel Acosta

Working Papers

The Perceived Causes of Monetary Policy Surprises. 2022 (March).
Abstract I estimate the macroeconomic effects of two critical aspects of Federal Reserve (Fed) communications: forward guidance regarding the path of interest rates and the provision of macroeconomic information. To estimate these effects, I identify two new series of shocks: monetary policy shocks and information shocks. I recover the shocks by estimating a model of how Fed announcements determine interest-rate and GDP expectations in high frequency, using a measure of GDP forecast revisions I construct from the text of newspaper articles. To identify the model, I use a discrete change in the Fed's communication policy: the introduction of interest-rate forward guidance. I find that the identified monetary shock has macroeconomic effects that are consistent with New Keynesian models, and fall at the upper end of previous estimates. Additionally, information shocks resemble aggregate demand shocks and have effects of similar (absolute) magnitude as monetary shocks, which highlights the importance of the Fed's role in providing macroeconomic information.

The Regressive Nature of the U.S. Tariff Code: Origins and Implications. 2022 (September).
Abstract The U.S. tariff code has a surprising and little-known feature: tariffs are systematically higher on lower-end versions of goods relative to their higher-end counterparts. For example, a handbag made of reptile leather has a tariff rate of 5.3 percent, while a plastic-sided handbag has a tariff rate of 16 percent. In this paper, we document the presence, historical origins, and consequences of this regressive pattern. Regressive tariffs are present throughout the tariff code, but are especially pervasive in consumer goods categories, where tariffs are 4 percentage points higher, on average, for low-value varieties. Using a newly constructed dataset on legislated tariffs that covers all major trade agreements back to the 1930 Smoot-Hawley Tariff Act, we show that this variation in rates across varieties largely originated in trade agreements made in the 1930s and 40s and has persisted over time. Welfare estimates suggest that the regressive nature of tariff rates on consumer goods has important distributional consequences.

Work in Progress

The Consequences of Extending Unemployment Benefits During Recessions

Rationally Confused: On the Aggregate Implications of Information Provision Policies.
Abstract Managing inflation expectations is an essential aspect of monetary policy. But how does communicating about inflation affect the decisions of price-setting firms? Cross-country evidence from randomized control trials provides a seemingly contradictory picture of how providing firms with news about inflation affects their decisions, where both contractionary and expansionary responses are observed. In this paper, we develop a rational inattention model that reconciles this evidence. In our model, firms' optimal information sets do not allow them to fully distinguish between supply and demand shocks. Accordingly, the model predicts that an exogenous increase in inflation expectations should be contractionary for economies where supply shocks are more volatile, and vice versa. We find supporting evidence for this mechanism by comparing output-inflation correlations in the data. These findings highlight the significant role that the broad economic environment can play in determining the effects of information provision policies.

Estimating the Effects of Monetary Policy via High Frequency Factors.


A New Measure of Central Bank Transparency and Implications for the Effectiveness of Monetary Policy. 2023.
Abstract Transparency has been posited as a channel through which monetary policy is made more effective. This paper presents a new time-varying measure of the transparency of Federal Reserve deliberations, derived from the documents that the Fed uses to record and summarize each of its meetings. The measure---the similarity of the minutes and transcripts of each Federal Open Market Committee (FOMC) meeting---is largely, though not entirely, shaped by FOMC leadership. Monetary policy shocks have about a 40 percent larger effect on nominal and real interest rates when the prevailing level of transparency is high, suggesting an important role for transparency in determining the efficacy of monetary policy. These effects are primarily driven by transparency about monetary policy strategies conditional on the state of the economy. A simple model of FOMC announcements consistent with these results highlights that high transparency enhances monetary policy's effectiveness by increasing the FOMC's signaling ability, but diminishes the ability for policymakers to generate market surprises.

Using Occupation to Measure Intergenerational Mobility. 2015.
Abstract Scholarly investigations of intergenerational mobility typically focus on either the occupations of fathers and sons or their incomes. Using an identical sample of fathers and sons, we examine how estimates of intergenerational mobility in income and occupational prestige are affected by (1) measurement that uses long time averages and (2) varying the point in the life cycle when outcomes are measured. We find that intergenerational occupational mobility is overstated when using a single year of fathers’ occupation compared to a 10-year average centered on mid-career. We also find that for both income and occupation, mobility estimates are largest when sons are in their mid-career, suggesting that this may be the ideal period in which to measure their status. Finally, we see differences in the pattern of estimates across the two types of measures: for income, estimates of intergenerational persistence are highest when fathers are in their mid-career; for occupation, estimates are much larger when fathers’ occupations are accounted for late in their careers.

Other Writing

Hanging on every word: Semantic analysis of the FOMC's postmeeting statement. 2015.

The views expressed here are mine only, and should not be interpreted as reflecting the views of the Board of Governors of the Federal Reserve System, or of any other person associated with the Federal Reserve System.