This paper shows how policy announcements can be used to manage expectations. Using regional variation in radio exposure, I evaluate the impact of FDR's 1935 Fireside Chat, in which he showcased the introduction of important social policies, establishing a new expansionary cycle of the New Deal. I document that cities withhigher exposure to the announcement exhibited a significant increase in spending on durable goods. The estimated effect is consistent with changes in expectations in line with the policies announced. This paper shows the power of communication as a policy tool.
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© 2022 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology
The President and Fellows of Harvard College and the Massachusetts Institute of Technology