Central Banks’ Communication Strategy and Content Analysis of Monetary Policy Statements: The Case of Fed, ECB and CBRT

Kahveci, Eyüp; Odabaş, Aysun

doi:10.1016/j.sbspro.2016.11.039

Cited by 27 publications

(13 citation statements)

References 10 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…As part of the prediction of market performance, we mention a study of annual reports of more than a thousand of firms (see Balakrishnan et al, 2010), and also the analysis of financial reports through the connection between the words and the financial risk of various companies and banks (see Tsai and Wang, 2017;Agarwal et al, 2019). Furthermore, it is worthy to mention the case of Kahveci and Odabaş (2016), in which the textual analysis has been employed to explore the semantic of monetary policy documents from the Federal Reserve Board, In a more general economic and financial framework we can evidence many works that deepen text mining on the analysis of stock markets, stock returns, trading and, more generally, on the ability of transforming qualitative variables into quantitative measures to improve financial fore-casts and market predictions (see, e.g. Blasco et al, 2005;Schumaker and Chen, 2009;Groth and Muntermann, 2011;Huang and Li, 2011;Loughran and McDonald, 2016;Mishra and Singh, 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

The interconnectedness of the economic content in the speeches of the US Presidents

Cinelli¹,

Ficcadenti²,

Riccioni³

2019

Ann Oper Res

View full text Add to dashboard Cite

The speeches stated by influential politicians can have a decisive impact on the future of a country. In particular, the economic content of such speeches affects the economy of countries and their financial markets. For this reason, we examine a novel dataset containing the economic content of 951 speeches stated by 45 US Presidents from George Washington (April 1789) to Donald Trump (February 2017). In doing so, we use an economic glossary carried out by means of text mining techniques. The goal of our study is to examine the structure of significant interconnections within a network obtained from the economic content of presidential speeches. In such a network, nodes are represented by talks and links by values of cosine similarity, the latter computed using the occurrences of the economic terms in the speeches. The resulting network displays a peculiar structure made up of a core (i.e. a set of highly central and densely connected nodes) and a periphery (i.e. a set of non-central and sparsely connected nodes). The presence of different economic dictionaries employed by the Presidents characterize the core-periphery structure. The Presidents' talks belonging to the network's core share the usage of generic (non-technical) economic locutions like "interest" or "trade". While the use of more technical and less frequent terms characterizes the periphery (e.g. "yield"). Furthermore, the speeches close in time share a common economic dictionary. These results together with the economics glossary usages during the US periods of boom and crisis provide unique insights on the economic content relationships among Presidents' speeches.

show abstract

Section: Literature Reviewmentioning

confidence: 99%

The interconnectedness of the economic content in the speeches of the US Presidents

Cinelli¹,

Ficcadenti²,

Riccioni³

2019

Ann Oper Res

View full text Add to dashboard Cite

show abstract

“…In this context, central banks have started to implement unconventional monetary policy measures and to practice quantitative easing and s. 25). The post-crisis transition in Central Bank policy from mystery and inscrutability to the era of transparency and the importance of "forward guidance" is a demonstration of how rapidly and radically communication strategy has changed (Kahveci and Odabaş, 2016). Importantly, forward guidance is designed to contribute to monetary easing and to halt the decline in economic activity.…”

Section: Unconventional Policiesmentioning

confidence: 99%

How Monetary Policy Strategies Changed After The Global Financial Crises?

Kahveci¹

2017

The European Proceedings of Social and Behavioural Sciences

Self Cite

View full text Add to dashboard Cite

The aim of this paper is to analyze the main monetary policy shifts of central banks before and after the crisis and to see their impacts on monetary policy and communication strategies. In this regard, a number of central banks from developed and developing countries have been chosen and analyzed in terms of their monetary policy changes and especially their communication strategies. The research is based on a literature review and a holistic, multiple method case studies, drawing on websites, a primary communication tool for central banks, and on the basic reports on their websites. We also benefit from the survey commentaries of the BIS conducted in 2013. While central banks in developed economies try to minimize the negative impacts of global financial crises they started to use unconventional policies such as quantitative easing, negative interest rate policy and forward guidance. On the other hand central banks in developing countries not only try to minimize the negative impact of crisis on the economy but also deal with the negative effects of the unconventional monetary policies from developed economies. To achieve that goal, they mostly started to implement macro-prudential measures. What is common in developing and developed countries during and after the global crisis is that they increased the awareness of financial stability and established new financial stability bodies and included financial stability in their policy mix. To do this some of them has changed their law and even their organizational structure.

show abstract

“…The FOMC's communication strategy involves issuing a policy statement after each meeting while the minutes of the meetings are released to the public three weeks after the policy decision date. Similar monetary policy communication strategies are in place in several other central banks around the world, including the Bank of England, Bank of Japan, Bank of In line with the increased level of communication among central banks, a new but growing body of literature has focused on the extraction of useful insights from monetary policy documents using different text mining techniques (see Shirota, 2015;Bruno, 2016;Kahveci and Odabas, 2016;Luangaram and Wongwachara, 2017;Oshima and Matsubayashi, 2018;Park et al, 2019;Shapiro and Wilson, 2019;Omotosho, 2020). According to Blinder et al (2008), different methods are available for the analysis of central bank communication; including the indirect approach (whereby financial market reactions to policy announcements are measured using event windows), and a direct approach (whereby the researcher provides a subjective assessment of central bank communication by manually reading through the policy document and coding its contents into numerical scales).…”

Section: Introductionmentioning

confidence: 99%

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

Tumala¹,

Omotosho²

2020

CBN-JAS

View full text Add to dashboard Cite

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.

show abstract

Central Banks’ Communication Strategy and Content Analysis of Monetary Policy Statements: The Case of Fed, ECB and CBRT

Cited by 27 publications

References 10 publications

The interconnectedness of the economic content in the speeches of the US Presidents

The interconnectedness of the economic content in the speeches of the US Presidents

How Monetary Policy Strategies Changed After The Global Financial Crises?

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

Contact Info

Product

Resources

About