Unconventional Monetary Policies and Expectations on Economic Variables

We investigate whether forward guidance and large scale asset purchases are effective in steering economic expectations the US. Using series of monetary policy shocks recovered Swanson (2020), local projections, an algorithm to select best empirical model, we show that unconventional policies tilting a direction consistent with central bankers' will. Our findings provide two more insights: responses LSAP stronger than those following FG shock; both types larger after contractionary as compared expansionary ones.