Fireside Chats: Communication and Consumers’ Expectations in the Great Depression

77 Pages Posted: 26 Oct 2020

See all articles by Mathieu Pedemonte

Mathieu Pedemonte

Inter-American Development Bank (IDB)

Date Written: October 06, 2020

Abstract

This paper shows how policy announcements can be used to manage expectations and have a role as a policy tool. Using regional variation in radio exposure, I evaluate the impact of President Franklin D. Roosevelt’s 1935 Fireside Chat, in which he showcased the introduction of important social policies, establishing a new cycle of the New Deal. I document that cities with higher exposure to the announcement exhibited a significant increase in spending on durable goods. I provide evidence that this result is not driven by wealth or other potentially confounding variables. The estimated effect is consistent with changes in expectations toward the policies announced. This paper shows the power of communication as a policy tool in affecting economic activity.

Keywords: policy announcements, forward guidance, policy communications, New Deal

JEL Classification: E21, D84, N32

Suggested Citation

Pedemonte, Mathieu, Fireside Chats: Communication and Consumers’ Expectations in the Great Depression (October 06, 2020). FRB of Cleveland Working Paper No. 20-30, Available at SSRN: https://ssrn.com/abstract=3717964 or http://dx.doi.org/10.2139/ssrn.3717964

Mathieu Pedemonte (Contact Author)

Inter-American Development Bank (IDB)

1300 New York Avenue NW
Washington, DC 20577
United States

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