Fireside Chats: Communication and Consumers’ Expectations in the Great Depression
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.
File format is text/html
Description: Full Text
Provider: Federal Reserve Bank of Cleveland
Part of Series: Working Papers
Publication Date: 2020-10-06