Seminarios

Abstract:

Motivated by an increasing interest from economic authorities to use communication as a policy tool, I use regional variation in radio exposure in 1930 to analyze the impact of President Franklin D. Roosevelt’s 1935 speech in which he showcased the introduction of important social policies. I document that states and cities with higher exposure to the announcement exhibited a significant increase in spending of durable goods. I transcribed weekly data on banks debits and show that they increased 20% the month following the speech in fully exposed cities relative to non-exposed ones. I provide evidence that suggests that this result is not driven by wealth or other potentially confounding variables. To better understand these results, I develop a model where consumers live in a multi-region monetary union, have sticky information and consume durable and non-durable goods to show how regions with more informed consumers increase their spending after a policy announcement, similar to FDR’s.