Through a Crystal Ball Darkly: The Future of Monetary Policy Communication

2018 ◽  
Vol 108 ◽  
pp. 567-571 ◽  
Author(s):  
Alan S. Blinder
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
General Public ◽  
Crystal Ball ◽  
Central Bank Communication ◽  
Policy Communication ◽  
The Future ◽  
Great Confidence ◽  
Monetary Policy Committees ◽  
Over Time

I make six predictions about the future of central bank communication about monetary policy. Some are made with great confidence, like: transparency will increase over time. Others are far riskier, like: attempts to communicate with the general public, though laudable, will fail. I also suggest ways in which the so-called cacophony problem on monetary policy committees (speaking with too many voices) can be mitigated.

scholarly journals A Text Mining Analysis of Central Bank Monetary Policy Communication in Nigeria

2020 ◽  
pp. 73-107
Author(s):  
Mohammed M. Tumala ◽  
Babatunde S. Omotosho
Keyword(s):  
Monetary Policy ◽  
Text Mining ◽  
Central Bank ◽  
Communication Strategy ◽  
Central Bank Communication ◽  
Monetary Policy Committee ◽  
Textual Data ◽  
Policy Communication ◽  
Policy Objectives ◽  
Monetary Policy Transparency

This paper employs text-mining techniques to analyse the communication strategy of the Central Bank of Nigeria (CBN) during the period 2004-2019. Since the policy communique released after each meeting of the CBN’s monetary policy committee (MPC) represents an important tool of central bank communication, we construct a corpus based on 87 policy communiques with a total of 123, 353 words. Having processed the textual data into a form suitable for analysis, we examined the readability, sentiments, and topics of the policy documents. While the CBN’s communication has increased substantially over the years, implying increased monetary policy transparency; the computed Coleman and Liau readability index shows that the word and sentence structures of the policy communiques have become more complex, thus reducing its readability. In terms of monetary policy sentiments, we find an average net score of -10.5 per cent, reflecting the level of policy uncertainties faced by the MPC over the sample period. In addition, our results indicate that the topics driving the linguistic contents of the communiques were influenced by the Bank’s policy objectives as well as the nature of shocks hitting the economy per period.

scholarly journals Mexico’s Monetary Policy Communication and Money Markets

2019 ◽  
Vol 11 (2) ◽  
pp. 81
Author(s):  
Alicia Garcia-Herrero ◽  
Eric Girardin ◽  
Arnoldo Lopez-Marmolejo
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Financial Markets ◽  
Strong Evidence ◽  
Money Market ◽  
Significant Rise ◽  
Money Markets ◽  
Governing Body ◽  
Central Bank Communication ◽  
Policy Communication

Central bank communication is becoming a key aspect of monetary policy. How much financial markets listen and, possibly, understand Banco de Mexico’s communication on its monetary policy stance should be a key consideration for the central bank to further modernize its monetary policy toolkit. In this paper, we tackle this issue empirically by using our own index of the tone of communication based on Banco de Mexico’s speeches and statements and find that Mexican money markets do not only listen but they also understand the stance of monetary policy conveyed in the central bank’s words. Regarding the ability to listen we find that both the volatility and volume in the money market rates change right after communication from Banco de Mexico’s governing body. As for the markets’ understanding, we document a statistically significant rise in money market rates the more hawkish communication is. All in all, our results show strong evidence of effective oral and written communication from the Central Bank towards Mexico’s money markets.

Introduction

2021 ◽  
pp. 1-28
Author(s):  
Massimo Rostagno ◽  
Carlo Altavilla ◽  
Giacomo Carboni ◽  
Wolfgang Lemke ◽  
Roberto Motto ◽  
...  
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Public Good ◽  
Monetary Union ◽  
European Central Bank ◽  
The Public ◽  
European Central ◽  
The Past ◽  
The Future ◽  
20Th Anniversary

Institutions dedicated to serving the public good must look to the past to learn from experience; and look to the future to prepare, as best they can, for the trials that might lie ahead. The 20th anniversary of Economic and Monetary Union (EMU) offers an opportunity to apply such a perspective to the monetary policy of the European Central Bank (ECB): to evaluate its accomplishments and to learn the lessons that can improve the conduct of its policy in the future....

Do monetary policy transparency and central bank communication reduce interest rate disagreement?

2019 ◽  
Vol 39 (3) ◽  
pp. 368-393
Author(s):  
Ruttachai Seelajaroen ◽  
Pornanong Budsaratragoon ◽  
Boonlert Jitmaneeroj
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Central Bank ◽  
Central Bank Communication ◽  
Monetary Policy Transparency

scholarly journals Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence

2008 ◽  
Author(s):  
Alan Blinder ◽  
Michael Ehrmann ◽  
Marcel Fratzscher ◽  
Jakob De Haan ◽  
David-Jan Jansen
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Central Bank Communication

African central banks face growing political pressures

2020 ◽  
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Central Banks ◽  
Financial Assistance ◽  
Economic Pressure ◽  
Content Type ◽  
The Real ◽  
Political Interference ◽  
Real Value ◽  
Over Time

Significance The move confirms long-held suspicions that the BoZ is subject to considerable political interference, which has increased as COVID-19 exacerbates the economic pressure on the ruling Patriotic Front (PF) government. Similar concerns have been raised to differing degrees about Nigeria and Zimbabwe. Impacts Rising inflation will be compounded by looser monetary policy, eroding the real value of wages over time, increasing food staple costs. Weakening central bank oversight could lead to greater diversion of COVID-19 relief funds. In the absence of international financial assistance, Lungu will find it extremely difficult to revive his flagging popularity.

Writing Clearly: The ECB’s Monetary Policy Communication

2013 ◽  
Vol 14 (1) ◽  
pp. 50-72 ◽  
Author(s):  
Aleš Bulíř ◽  
Martin Čihák ◽  
Kateřina Š Šmídkova
Keyword(s):  
Risk Assessment ◽  
Central Bank ◽  
European Central Bank ◽  
Central Banks ◽  
Press Releases ◽  
Central Bank Communication ◽  
Additional Information ◽  
European Central ◽  
Policy Communication ◽  
Better Than

Abstract The article presents a novel methodology for measuring the clarity of central bank communication using content analysis, illustrating the methodology with the case of the European Central Bank (ECB). The analysis identifies the ECB’s written communication as clear in about 85-95% of instances, which is comparable with, or better than, similar results available for other central banks. We also find that the additional information on risk to inflation and especially projection risk assessment contained in the ECB’s Monthly Bulletins helps to improve communication clarity compared to ECB’s press releases. In contrast, the bulletin’s communication on monetary developments has a negative, albeit small, impact on clarity.

scholarly journals Does the high-frequency data is helpful for forecasting Russian inflation?

2021 ◽  
Vol 37 (2) ◽  
pp. 318-343
Author(s):  
Dmitriy Tretyakov ◽  
◽  
Nikita Fokin ◽  
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
High Frequency ◽  
Inflation Targeting ◽  
Low Frequency ◽  
High Frequency Data ◽  
Frequency Data ◽  
Policy Regime ◽  
The Future ◽  
Forecasting Inflation

Due to the fact that at the end of 2014 the Central Bank made the transition to a new monetary policy regime for Russia — the inflation targeting regime, the problem of forecasting inflation rates became more relevant than ever. In the new monetary policy regime, it is important for the Bank of Russia to estimate the future inflation rate as quickly as possible in order to take measures to return inflation to the target level. In addition, for effective monetary policy, the households must trust the actions of monetary authorities and they must be aware of the future dynamics of inflation. Thus, to manage inflationary expectations of economic agents, the Central Bank should actively use the information channel, publish accurate forecasts of consumer price growth. The aim of this work is to build a model for nowcasting, as well as short-term forecasting of the rate of Russian inflation using high-frequency data. Using this type of data in models for forecasting is very promising, since this approach allows to use more information about the dynamics of macroeconomic indicators. The paper shows that using MIDAS model with weekly frequency series (RUB/USD exchange rate, the interbank rate MIACR, oil prices) has more accurate forecast of monthly inflation compared to several basic models, which only use low-frequency data.

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