Frederico Mira Godinho

"Complexity in Monetary Policy Communications" (Job Market Paper) - March 2023

Abstract: How does the complexity of policy statements affect economic outcomes? When looking at monetary policy announcements, I show that complex language reduces the effects of monetary policy shocks on asset prices. I then look at how the general public, a non-specialized audience, reacts to distinct policy statements that only differ in the complexity of the words used, by making use of new data from a Randomized Control Trial experiment. For this audience, a simpler message is more effective in shaping households' expectations and enhancing understanding, but it reduces the credibility of the Federal Reserve relative to more complex, and less easily understood, communication.

"How Much Did the ECB Really Contribute to Ending the Sovereign Debt Crisis?" - May 2022

Revise & Resubmit at Journal of International Economics

Other versions: SSRN | Finalist in the 2021 ECB Young Economists' Competition

Abstract: I show that once one incorporates country-specific yields into the identification of monetary factors for the European Central Bank, a new factor arises which plays a quantitatively important role in explaining the end of the sovereign debt crisis and the resulting convergence in economic outcomes across the Euro block. Specifications that exclude this novel factor instead imply that the central bank played little role in ending the crisis. I argue that this new factor reflects ECB communications that respond to certain countries' conditions beyond their share of Euro area activity, mostly during the crisis period.