Monetary policy communication and inflation expectations: New evidence about tone and readability

Do multisource data matter for NGP prediction? Evidence from the G-LSTM model

“…From research in marketing, it has been noted that text readability can affect the transmission and sharing of information, thereby guiding the information receiver and ultimately influencing the behavioral decisions of potential investors. Both [ 37 , 38 ] demonstrated the contribution of text readability to time series prediction. Although there are limited researches about using text information to assist natural gas price prediction, many scholars have confirmed the feasibility of this approach and proposed optimistic prospects for it [ 39 ].…”

World Economic Outlook, October 2023

“…Recent studies suggest that improvements in monetary policy frameworks-encompassing central banks' independence and transparency and their communications strategies-can increase agents' attention to and understanding of monetary policy actions, helping to make inflation expectations more forward looking (Coibion and others 2020;Carotta, Mello, and Ponce 2023). Brazil's recent decision to adopt a continuous (rather than calendar year) 3 percent inflation rate target from 2025 onward is a concrete example of an improvement in operational effectiveness and communications strategy, helping to reduce uncertainty and enhance monetary policy effectiveness.…”