bio
Dr Howard Kung joined London Business School in August 2014, after two years at the University of British Columbia, Sauder School of Business. He completed his PhD in Finance at Duke University and prior to his doctorate, he studied Mathematics and Economics at the University of Virginia.
Howard’s research focuses on macro-finance and asset pricing. It encompasses monetary/fiscal policy, industrial organisation, and its interaction with asset pricing and firms’ investment.
He has published his research in top journals such as the Review of Financial Studies, the Journal of Financial Economics, the Journal of Finance, and the Journal of Monetary Economics. His research has been covered in major media outlets such as the Wall Street Journal, CNBC, Reuters, Forbes, and Bloomberg. Howard teaches in the MBA and PhD programmes.
Publications
Threats to Central Bank Independence: High-Frequency Evidence with Twitter
Abstract
This paper presents market-based evidence that President Trump influences expectations about monetary policy. The main estimates use tick-by-tick fed funds futures data and a large collection of Trump tweets criticizing the conduct of monetary policy. These collected tweets consistently advocate that the Fed lowers interest rates. Identification in our high-frequency event study exploits a small time window around the precise time stamp for each tweet. The average effect of these tweets on the expected fed funds rate is strongly statistically significant and negative, with a cumulative effect of around negative 10 bps. Therefore, we provide evidence that market participants believe that the Fed will succumb to the political pressure, which poses a significant threat to central bank independence.
