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The Information Content of Central Bank Minutes

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Author Info

  • Apel, Mikael

    ()
    (Monetary Policy Department, Central Bank of Sweden)

  • Blix Grimaldi, Marianna

    ()
    (Monetary Policy Department, Central Bank of Sweden)

Abstract

One characteristic feature of central banks today is that policy decisions are almost exclusively made by a committee rather than by a single policy maker. Another is that central banks are considerably more transparent than they used to be. Together, this has brought to the fore an important but so far unresolved issue: to what extent should a central bank’s communication reflect the full spectrum of opinions among its committee members? Does information on all members’ views make monetary policy easier to understand and predict, or does it make it harder? We address this issue by employing a novel method. We measure the sentiment and tone of the minutes of the Swedish central bank using an automated content analysis that converts the qualitative information in the minutes to a quantitative measure. We find that this measure is useful in predicting future policy rate decisions.

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File URL: http://www.riksbank.se/Documents/Rapporter/Working_papers/2012/rap_wp261_120426.pdf
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Bibliographic Info

Paper provided by Sveriges Riksbank (Central Bank of Sweden) in its series Working Paper Series with number 261.

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Length: 26 pages
Date of creation: 01 Apr 2012
Date of revision:
Handle: RePEc:hhs:rbnkwp:0261

Contact details of provider:
Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
Phone: 08 - 787 00 00
Fax: 08-21 05 31
Email:
Web page: http://www.riksbank.com/
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Related research

Keywords: Central Bank Communication; Minutes; Content Analysis;

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References

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  1. Michelle T. Armesto & Rubén Hernández-Murillo & Michael T. Owyang & Jeremy Piger, 2009. "Measuring the Information Content of the Beige Book: A Mixed Data Sampling Approach," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(1), pages 35-55, 02.
  2. Apel, Mikael & Claussen, Carl Andreas & Lennartsdotter, Petra, 2010. "Picking the Brains of MPC Members," Working Paper Series 237, Sveriges Riksbank (Central Bank of Sweden).
  3. Alan S. Blinder & Michael Ehrmann & Marcel Fratzscher & Jakob De Haan & David-Jan Jansen, 2008. "Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 46(4), pages 910-45, December.
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Cited by:
  1. Petra Geraats, 2014. "Monetary Policy Transparency," CESifo Working Paper Series 4611, CESifo Group Munich.
  2. Rosa, Carlo, 2013. "The financial market effect of FOMC minutes," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 67-81.

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