000			01428nam a22001457a 4500
999			_c522690 _d522690
008			230504b ||||| |||| 00| 0 eng d
100			_aBauer, M.D. Bernanke, B.S. and Milstein, E. _940581
245			_aRisk appetite and the risk: Taking channel of monetary policy
260			_aThe Journal of Economic Perspectives
300			_a37(1), winter, 2023: p.77-100
520			_aMonetary policy affects financial markets and the broader economy in part by changing the risk appetite of investors. This article provides new evidence for this so-called risk-taking channel of monetary policy by revisiting and extending event-study analysis of Federal Open Market Committee announcements. We document significant effects of unexpected monetary policy changes on risk indicators drawn from equity, fixed-income, credit, and foreign exchange markets. We develop a new index of risk appetite based on the common component of these indicators. Surprise monetary easing leads to strong and persistent increases in our index, and vice versa for tightening surprises, consistent with the view that monetary policy affects asset prices in large part through its effects on risk appetite. We discuss the implications of the risk-taking channel for monetary policy transmission, optimal monetary policy, and financial stability.- Reproduced
773			_aThe Journal of Economic Perspectives
906			_aMONETARY POLICY
942			_cAR