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Monetary Policy Press Releases: An International Comparison

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  • Mario Gonzalez
  • Raul Cruz Tadle

Abstract

Around the world, several countries have adopted inflation targeting as their monetary policy framework. These institutions set their target interest rates in monetary policy meetings. The policy decisions are then circulated through press releases that explain those decisions. The information contained in these press releases includes current policies, economic outlook, and signals about likely future policies. In this paper, we examine and compare the information contained in the monetary press releases of a group of inflation targeting countries using linguistic methods, such as Latent Dirichlet Allocation (LDA), an automated linguistic method. In addition, using Semi-automated Content Analysis, we create a measure that we call the Sentiment Score index based on this information for each of the countries in the sample. We use this index to compare the communication strategy of the central banks and how predictable monetary policy movements are based on the information given in the press releases.

Suggested Citation

  • Mario Gonzalez & Raul Cruz Tadle, 2021. "Monetary Policy Press Releases: An International Comparison," Working Papers Central Bank of Chile 912, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:912
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    References listed on IDEAS

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    1. Niţoi, Mihai & Pochea, Maria-Miruna & Radu, Ştefan-Constantin, 2023. "Unveiling the sentiment behind central bank narratives: A novel deep learning index," Journal of Behavioral and Experimental Finance, Elsevier, vol. 38(C).

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